Insight & Thought Leadership on the Global Economy

One of our most insightful economists examines the extraordinary actions the Federal Reserve, the Treasury, and other authorities took to cope with the economic catastrophe that followed the financial crash of 2008. (Paying the Price) A readable, balanced account of what they did, why they did it, and how well it worked out—so far. — Alice M. Rivlin, the Brookings Institution, former Director of OMB and Vice Chair of the Fed

Evaluating the Corker-Warner Bill

Housing finance reform received an important boost last month with the introduction in Congress of the Housing Finance Reform and Taxpayer Protection Act of 2013.1 The bipartisan legislation, written by Senators Bob Corker (R-TN) and Mark Warner (D-VA), represents a serious plan to resolve Fannie Mae and Freddie Mac and fix the nation’s broken housing finance system. The system’s current dysfunction is evident: Nearly nine out of 10 U.S. mortgage loans today are being made by the federal government via Fannie Mae, Freddie Mac, the Federal Housing Administration, and the Department of Veterans Affairs (see Chart). Taxpayers are thus taking on the risks inherent in about $1 trillion in mortgage loans originated each year.2 This is unnecessary, given that private financial institutions are willing, and with some guidance from regulators, able to safely make these loans.

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