We have analyzed the FRB/FDIC proposal mandating living wills for systemically-important financial institutions (SIFIs) with an eye to its impact on Fannie Mae, Freddie Mac and the FHLBs. Since we expect them to be so designated once the FSOC process is finalized, the rule would apply to them. When it does, yet another facet of the new regulatory regime supplanting old-style FHFA regulation will be imposed. We have previously assessed the strategic impact SIFI rules will have on the GSEs, and the living-will ones are particularly potent. In our view, they will facilitate the Administration’s wind-down plan for Fannie and Freddie and put more pressure on faltering FHLBs to figure out what to do with themselves.
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