Credit risk transfer and de facto GSE reform
David Finkelstein,
Andreas Strzodka and
James Vickery ()
Economic Policy Review, 2018, issue 24-3, 88-116
Abstract:
The Fannie Mae and Freddie Mac credit risk transfer (CRT) programs, now in their fifth year, shift a portion of credit risk on more than $1.8 trillion of mortgages to private-sector investors. This study summarizes and evaluates the CRT programs, finding that they have been successful in reducing the exposure of the government-sponsored enterprises and the federal government to mortgage credit risk without disrupting the liquidity or stability of mortgage secondary markets. The programs have also created a new financial market for pricing and trading mortgage credit risk, which has grown in size and liquidity over time. In doing so, the CRT programs provide a valuable step forward in the reform of the U.S. housing finance system.
Keywords: securitization; Fannie Mae; Freddie Mac; mortgage; GSE; credit risk transfer (search for similar items in EconPapers)
JEL-codes: G10 G18 G21 G23 G28 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)
Downloads: (external link)
https://www.newyorkfed.org/medialibrary/media/rese ... risk_finkelstein.pdf Full text (application/pdf)
Related works:
Working Paper: Credit risk transfer and de facto GSE reform (2018) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:fip:fednep:00056
Ordering information: This journal article can be ordered from
Access Statistics for this article
More articles in Economic Policy Review from Federal Reserve Bank of New York Contact information at EDIRC.
Bibliographic data for series maintained by Gabriella Bucciarelli ().