Industry News

Alleged new accounting problems won’t shake Fannie’s core business

Top Fed official says there's no solvency issue
Published on Oct 5, 2005

Fannie Mae's alleged new accounting problems won't shake its core business, a top Federal Reserve official said Tuesday, according to media accounts. "I don't see anything in these reports that suggests a solvency issue," St. Louis Federal Reserve Bank President William Poole told Reuters after making a speech. Fannie's shares plunged last week after Dow Jones published a report saying regulators found new accounting violations at the mortgage giant. Fannie Mae is already under scrutiny for alleged bookkeeping irregularities that could force the company to restate earnings by as much as $12 billion. A spokeswoman for the Office of Federal Housing Enterprise Oversight, which oversees Fannie Mae, would not confirm or deny last Wednesday the report that the regulator has found extensive additional problems. Poole told reporters the issue really served to underscore his longstanding argument that government sponsored enterprises Fannie Mae and Freddie Mac need more regulation, Reut...

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