Fannie Mae (FNMA)

[malebaboon]

Dollars1: IMO the senior preferred's value should cover the requirements:

Basel III introduces a “Leverage Ratio” such that the amounts of assets and commitments should not represent more than 33 times the Regulatory Capital, regardless of the level of their risk-weighting and of the credit commitments being drawn down or not The Financial Stability

Board recommended in July 2011 that the 29 identified systemically important financial institutions have a Core Tier 1 ratio increased between 1% and 2.5%. Of course these “SIFIs” are the main large corporates’ banking counterparts. This provision has been “enacted” by the G20 in November 2011.

Link

200 billion ought to cover all these requirements. Of course, legislation would never be enacted so simply and eloquently, but it shows sufficient backing is possible. Perhaps the government could provide a 'wind-down' backing of their own: a five to ten year period during a transition to all private MBS. 100%-90%-80% etc until the agreed level of private capitalization is reached, per Basal requirements, and the government backstop is removed with FnF as private companies and allowing other private companies to use the Common Security Platform.

IMO

MB