With that goal in mind, we are near completion of a comprehensive program to raise prudential standards for our most systemically important banks. But fundamental housing finance reform—including reform to address the ultimate status of Fannie Mae and Freddie Mac, two systemically important government sponsored enterprises (GSEs)—remains on the “to do” list.
As memories of the crisis fade, the next few years may present our last best chance to finish these critical reforms. Failure to do so would risk repeating the mistakes of the past. The pre-crisis system Congress created Fannie Mae in 1938 and Freddie Mac in 1970.