In principle, subordinated-debt spreads should be more responsive to market developments than senior-debt spreads, particularly if issuance was mandatory and the Congress establishes a clear and credible receivership process for the GSEs. Fannie and Freddie took a step in the direction of enhancing GSE market discipline when they issued subordinated debt in 2000.
During this year, the spot price of Brent crude oil has increased dramatically from approximately $ per barrel in February to levels around $ per barrel towards the end of April and an average of $ per barrel in June.