Fannie & Freddie vs. Wall Street? That's Wishful Spin | Cato Institute

Fannie & Freddie vs. Wall Street? That's Wishful Spin | Cato Institute: "If you combined the required capital for both Fannie Mae and Bank A, the financial system is still holding less than half as much capital than if mortgages were held whole on bank balance sheets.

Had all single-family mortgages been held whole on bank balance sheets in 2006, our financial system would have held over $210 billion in additional capital, not far off from the $205 billion obligated under TARP’s bank capital purchase program.

The primary function of Fannie Mae and Freddie Mac has long been to allow banks an avenue for transferring the credit risk of their mortgages to the taxpayer."