Last week, the GAO released a report evaluating fourteen proposals to redesign the GSE conservatorships, criticizing many of them on grounds that they failed to lay out underlying objectives. Given that many derive from parties with direct interests as shareholders, lenders, and securitizers, this is not entirely surprising. Still, the GAO’s report is a timely reminder of why the conservatorships are structurally unstable and just how much risks remains embedded at the GSEs.
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