We have reviewed the FY12 Obama budget, which includes no surprises germane to the GSEs. However, the Analytical Perspective discussion focuses in part on systemic risk; our read of this indicates that Fannie and Freddie will surely come in for systemic regulation and the FHLBs are most likely also bound for this fate. The budget also bases its deficit reductions in small part on projected inflows from Fannie and Freddie, but we do not think these will stay anyone’s reforming hand.

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