A third approach, besides privatization and covered bonds, is to tie the government-sponsored enterprises even more closely to the government. In doing so, the choice must be made whether to continue to allow an element of private ownership in these organizations. A public utility model offers one possibility for incorporating private ownership.
In such a model, the GSE remains a corporation with shareholders but is overseen by a public board. Beyond simply monitoring safety and soundness, the regulator would also establish pricing and other rules consistent with a promised rate of return to shareholders. Public utility regulation itself, of course, has numerous challenges and drawbacks, such as reduced incentives to control costs.