As Fannie and Freddie increase in size relative to the counterparties to their hedging transactions, the ability of these GSEs to quickly correct a misjudgment in their complex hedging strategies becomes more difficult, especially when vast reversal transactions are required to rebalance portfolio risks. We are thus highly dependent on the risk-managers at Fannie and Freddie to do everything right.
But she will make good decisions. As you said yourself, you’re going to be leaving the ECB. Are you a candidate to become Managing Director of the IMF? No, I’m not a candidate for the IMF. There are plenty of good candidates. Don’t ask me who my preferred candidate would be, because the decision is not up to me.