As clients will recall, we have highlighted the GSE and mortgage impact of a recent, sweeping FRB proposal to impose systemic surcharges and credit-exposure limits on the nation’s biggest banks, advising on the indirect impact the rules will have despite the proposed carve-out from certain limits for Fannie and Freddie obligations while the GSEs are in conservatorship. We have also concluded that the FHLBs will soon be deemed systemic, a status that brings them under the FRB’s rules. Looks like the GSEs read the rules the same way, based on the comments filed so far with the FRB. Here, we analyze the letters, noting concerns raised and what the FRB may well do in response.
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