Stress Tests Reiterate Lack of Capital for Fannie Mae, Freddie Mac
The Wall Street Journal - April 30, 2015 - May 1, 2015
By Joe Light
Fannie Mae and Freddie Mac would require up to $157.3 billion in additional support from the U.S. Treasury in a severe economic downturn, according to the result of stress tests released on Thursday by the Federal Housing Finance Agency.
The tests, required by the Dodd-Frank financial-regulatory overhaul, are designed by the Federal Reserve to simulate a severe recession, in which the unemployment rate rises to 10% by mid-2016 and real gross-domestic product falls 4.5% by the end of 2015 before beginning to recover. The projections aren’t meant to be “expected outcomes,” the agency said.
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