-- In testimony before the Senate Banking Committee, Treasury Secretary John Snow warned that embattled mortgage securities concerns Fannie Mae and Freddie Mac could threaten the economy if lawmakers do not tighten their investment activities. "The risks undertaken by the [government-sponsored enterprises], if not properly managed, may pose a threat to their solvency, the stability of the other financial institutions and the strength of our economy," Snow said in prepared remarks. According to Reuters, the secretary told Congress to limit the size of the companies' mortgage portfolios, saying that they are not needed to fulfill the core mission of supporting home ownership. A day earlier, Federal Reserve Chairman Alan Greenspan made similar remarks, advising the committee to govern the size of the companies' respective portfolios. Both Fannie Mac and Freddie Mac have suffered massive accounting scandals over the past year. Like Greenspan, Snow said that lawmakers should phase in limits on the companies' portfolio activities in order to protect the markets.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access