Abstract

http://ssrn.com/abstract=519042
 
 

References (55)



 
 

Citations (6)



 


 



Emerging Competition and Risk-Taking Incentives at Fannie Mae and Freddie Mac


W. Scott Frame


Federal Reserve Bank of Atlanta

Lawrence J. White


New York University (NYU) - Leonard N. Stern School of Business; Leonard N. Stern School of Business - Department of Economics

February 2004

FRB of Atlanta Working Paper No. 2004-4

Abstract:     
This paper examines two major forces that may soon increase competition in the U.S. secondary conforming mortgage market: (1) the expansion of Federal Home Loan Bank mortgage purchase programs and (2) the adoption of revised risk-based capital requirements for large U.S. banks (Basel II). The authors argue that this competition is likely to reduce the growth and relative importance of Fannie Mae and Freddie Mac and hence their franchise values and effective capital. Such developments could, in turn, lead to more risky behaviors by these two GSEs. It is this last consequence that warrants greater regulatory awareness.

Number of Pages in PDF File: 29

Keywords: Government-sponsored enterprises, mortgages, securitization, risk-based capital, moral hazard, charter value

JEL Classification: G21, G28

working papers series


Download This Paper

Date posted: March 22, 2004  

Suggested Citation

Frame, W. Scott and White, Lawrence J., Emerging Competition and Risk-Taking Incentives at Fannie Mae and Freddie Mac (February 2004). FRB of Atlanta Working Paper No. 2004-4. Available at SSRN: http://ssrn.com/abstract=519042 or http://dx.doi.org/10.2139/ssrn.519042

Contact Information

W. Scott Frame (Contact Author)
Federal Reserve Bank of Atlanta ( email )
1000 Peachtree Street, NE
Atlanta, GA 30309-4470
United States
404 498 8783 (Phone)
404 498 8810 (Fax)
Lawrence J. White
New York University (NYU) - Leonard N. Stern School of Business ( email )
44 West 4th Street
New York, NY NY 10012
United States
Leonard N. Stern School of Business - Department of Economics ( email )
269 Mercer Street
New York, NY 10003
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,737
Downloads: 282
Download Rank: 45,963
References:  55
Citations:  6

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.843 seconds