Fannie Mae-No Politics (FNMA)

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At FSOC, Calabria Takes One Last Swipe at the GSEs



June 27, 2021 - Dennis Hollier - [e-mail]



At the Financial Stability Oversight Council’s recent June principals meeting, the soon-to-be-former Federal Housing Finance Agency Director Mark Calabria once again demonstrated the kind of tone-deafness that vexed certain GSE supporters throughout his tenure.

Speaking about the Securities and Exchange Commission’s work on money market fund reform, the then-FHFA director made a point to get a couple of licks in on his wards.

After warning the council about the risks posed by government money market funds, Calabria went on to point out that these funds have large exposures to Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Not for the first time, he implied these were risky institutions.

“This interconnectedness can pose risks to the financial system,” he said. “In the case of enterprise debt, these concerns are heightened by the high leverage of Fannie and Freddie. In light of the potential risks posed by this interconnectedness, FHFA will continue to support the council’s monitoring of money market funds.”