Fannie Mae and Freddie Mac are much in the news today, as the federal government finds itself obliged to make the 'implicit' government guarantee quite explicit.
I wrote a lot about these strange entities some time ago, and you can read what I had to say about what should have been done at Reinventing the Government Corporation, 1995 Ill. L. Rev. 543.
Among other things, I advocated breaking up Fannie and Freddie into smaller bodies that would not be too big to fail, and that would compete more with each other. I also proposed various accountability measures, and even looked into the issuance of risky subordinated debt to act like a canary in a coal mine.
I've put the full table of contents in the extended part below.
1995 Ill. L. Rev. 543.
Table of Contents
- I. CREATION OF
FEDERAL GOVERNMENT CORPORATIONS - II. THE
ACCOUNTABILITY GAP - III.
REFORM - IV. SUMMARY
AND CONCLUSION
