CBO Recommends Fair Value for GSEs, Which Could Prompt More Active Management of MBS Portfolios
June 30, 2006
Government regulators and private accounting standard setters are moving more toward fair value accounting, with the Congressional Budget Office issuing a new report this week that recommends using this approach as the capital measurement for Fannie Mae and Freddie Mac. The government-sponsored enterprises’ own safety and soundness regulator, the Office of Federal Housing Enterprise Oversight, is considering incorporating fair value into its own oversight of Fannie and Freddie. This parallels efforts by the Financial Accounting…