Washington Post (08/15/08) P. D1; Birnbaum, Jeffrey H.; Cho, David
Morgan Stanley will review how vulnerable Fannie Mae and Freddie Mac are to new problems in the economy and the amount of capital they would need to withstand any stresses. The Treasury Department has hired the investment bank to evaluate the financial strength of the two government-sponsored enterprises, with hopes of gaining a better understanding of what it would need to rescue the companies in a crisis. The department has gained the authority to lend the companies money or buy their stock to keep them afloat, but Secretary Henry Paulson Jr. has continued to say he does expect to need to use the new powers.
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