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USA started the rescue operation of the mortgage system |
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Monday, 14 July 2008 |
Minister of Finance of the U.S. Henry Poulsan hot expressed support for the state to the pillars of mortgage loans Fannie Mae and Freddie Mac. Both companies fell in a rather difficult situation after the collapse in the price of their shares in recent weeks, which significantly impedes the ability to issue debt or raise new funds through a capital increase.
 Organizations, which together possess or are guarantors of half the Mortgage market in the country, amounting to 12 trillion dollars, will require over 70 billion dollars, analysts believe, quoted by Bloomberg.
During the weekend in the U.S. have conducted serious negotiations between the investment banks, representatives of government, congressmen and members of regulatory authorities. The meeting was caused by the collapse in the shares of Fannie Mae and Freddie Mac from last week, which deleted about 50 percent of market capitalization there. After the talks Finance Minister Henry Poulsan made remarks in which asked Congress to give a mandate for the purchase of any portion of the two companies and substantial funds for lending to them.
Another solution to which has reached the match, allowing investment banks to borrow funds directly from the central bank . According to analysts, such a move would help to restore confidence in the financial system and would have helped to promote between the bank loan (interbank lending). With the acquisition of shares of the two mortgage organizations, the US government is approaching to assume full guarantee issued by Fannie Mae and Freddie Mac debt. So with state aid is available exit for exit from the worst recession in the housing sector of the country for the past 25 years.
The proposals of the Finance Minister will be officially stated in the bill to be adopted during this week, added Bloomberg. Whether the market will get peace of mind and will return their faith in both companies may become clear today as it was planned to Freddie Mac attempted placement issue of short-term bonds amounting to 3 billion dollars.
The news from the U.S. contribute to a stabilization of the exchange rate of US dollar. After just after the start of the weekly trade green money decreased to its lowest value of 23 April onwards at 1,5937 EUR / USD, the dollar managed to more expensive to 1,5869 EUR / USD. |
Finances and Markets 
