Finally, the Federal Reserve Board believes that the GSEs’ investment portfolios should be firmly anchored to a measurable public purpose, such as the promotion of affordable housing. I believe that this approach provides a reasonable balance of social costs and benefits for the GSE portfolios. In particular, this approach would re-focus the GSEs on the affordable housing objectives given to them by the Congress.
16  Subordinated debt might be used to fund any assets allowed by the Congress and held by Fannie and Freddie that did not have a strong and easily measurable link to making housing more affordable.