Mnuchin was adamant that the Trump administration won’t just let Fannie and Freddie build up their capital buffers and then release the companies.
Treasury Secretary Steven Mnuchin made clear that freeing Fannie Mae and Freddie Mac from U.S. control won’t happen without an overhaul of the nation’s housing finance system, potentially dashing investors’ hopes that they might soon make a windfall from their stakes in the residential lending giants. In a recent interview, Mnuchin was adamant that the Trump administration won’t just let Fannie and Freddie build up their capital buffers and then release the companies. He also said he backed a key reform that only Congress can implement, casting doubt on how ambitious the administration will be absent a legislative fix. “What we’re not going to do is business as usual with no changes, just re-capitalize them and float them,” said Mnuchin, “There needs to be housing reform as part of this.” Mnuchin’s remarks also underscore that despite the administration’s determination, solving the biggest outstanding issue from the 2008 financial crisis is easier said than done. The President has ordered the Treasury Department to come up with a proposal for ending the Fannie and Freddie conservatorships.
Source: Yahoo Finance