New York Times (08/21/08); Bajaj, Vikas
A number of key figures in the financial arena insist that the government needs to make changes in the structures of Fannie Mae and Freddie Mac to minimize their risks to the financial markets. Former Securities and Exchange Commission Chairman Arthur Levitt Jr. believes the government should first stabilize the government-sponsored enterprises and reconsider their public-private role afterward, while former Federal Reserve Chairman Alan Greenspan and Federal Reserve Bank of Richmond President Jeffrey Lacker contend that the two GSEs should be divided into smaller entities and owned by investors. Additionally, former Federal Reserve Bank of St. Louis President William Poole believes a government takeover followed by the phasing out of the GSEs would be ideal. However, House Financial Services Committee Chairman Barney Frank, D-Mass., says, "Fannie and Freddie have stood up better and functioned better than a lot of private institutions."
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