| Franklin D Raines | ||||||
Freddie Mac and Fannie Mae, America's two largest agency debt issuers, have now implemented the latest steps in their voluntary six-point programme agreed with Congress last year to reassure clients and the public of their safety and soundness.
The programme, announced in October 2000 at the urging of Representative Richard Baker, chairman of the House of Representatives' agencies oversight subcommittee, comprised commitments to maintain more than three months' liquidity, to implement a risk-based capital stress test, to disclose publicly the results of credit and interest rate risk-sensitivity analyses, to issue subordinated debt and to obtain an annual risk to the government rating from a recognized rating agency.
Both Freddie Mac and Fannie Mae have received AA- ratings from Standard&Poor's and have gone beyond the terms of the agreement, which called for an annual rating, in requesting that the ratings should be continuously monitored.