Bernanke: Fannie, Freddie in No Danger of Failing

Associated Press (07/17/08); Aversa, Jeannine
In testimony before the U.S. House Financial Services Committee, Federal Reserve Chairman Ben Bernanke stressed that the government-sponsored enterprises (GSEs) are not on the verge of failure, as they are "adequately capitalized." However, he pointed out that the weak market is complicating Fannie Mae and Freddie Mac's efforts to raise capital. Bernanke also underscored the importance of legislation to enhance GSE oversight and insisted that keeping them out of government control is the "best solution." Meanwhile, in congressional testimony, Treasury Secretary Henry Paulson stated that the government rescue plan for the GSEs was intended to jump-start the market and that he hopes he does not have to employ the plan.