Fannie Mae-No Politics (FNMA)

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Karen PetrouVerified account
@KarenPetrou
Managing Partner of Federal Financial Analytics. Provides analytical and advisory services on financial legislative, regulatory, and public-policy issues.

Hidden in Fannie 4Q: new ROE standards that turn GSEs into utilities
This is key section. A required ROE makes a regulated company a utility – think power companies. Even biggest banks pick their own ROEs despite all the rules mandating higher capital, limited activities, etc...
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W/an ROE requirement, GSEs cannot discount to compete and must maximize profit under FHFA controls to dividend back to Treasury.

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Hidden in Fannie 4Q: new ROE standards that turn GSEs into utilities https://t.co/fCcW3Eeq1S

— Karen Petrou (@KarenPetrou) February 14, 2018