- FHFA's Mark Calabria responds to industry concerns of shrinking footprint saying that Fannie and Freddie cannot legally knowingly take risk against PSPAs.
- In other words, he is saying that the PSPAs are not capital, he argues that there are misperceptions out there that think that the PSPAs serve as capital.
- Calabria offers more capital as a solution to industry concerns "with Fannie and Freddie capital really is the binding constraint on the risk and footprint and activities they can take"
- Calabria says that we "absolutely need another round of PSPA to deal with the capital stack because (.) it will be very difficult if not impossible to raise outside capital."
For further details see:
Fannie/Freddie Regulator: PSPA Amendment Needed To Raise Outside Capital