Moody's Plots Possible Path For GSE Reform

It has been difficult to shake the impact of the 2008 global financial crisis. It required a series of unconventional central bank monetary policy adjustments euphemistically known as quantitative easing that has now raised fears of an asset bubble. One issue has not been addressed, Moody’s noted in a 15-page report on the potential outcomes and likely impact. One of the largest pieces of unfinished business from the crisis is found in resolving the conservatorships of government-sponsored entities Fannie Mae and Freddie Mac, commonly referred to as GSEs, which insure home mortgages in the US.

Uncertainty lies ahead with GSEs

In the wake of the 2008 financial crisis, when unsustainable mortgage...