Fair Value May Add Trillions to GSEs’ Balance Sheets
July 15, 2009
When Fannie Mae and Freddie Mac decide to adopt the revised accounting guidance on fair value, it could result in a combined $3.6 trillion worth of mortgage-backed securities guarantees onto the pair’s balance sheets, which would have demanded an additional $79 billion in regulatory capital under their pre-conservatorship regulatory regime. The guidance from the...