The Geithner portion of the GSE hearing just ended. I was able to listen in for about 75% of the hearing. Here were the takeaways I found interesting.
- Geithner says it’s not realistic to abolish the GSEs now or at any time in the future.
- Geithner supports the idea of having an independent agency oversee consumer protection and thinks it’s a terrible idea to put consumer protection within the Fed, as the Dodd bill now proposes.
- Geithner was asked by Rep Scott Garrett (R-NJ) whether GSE is Sovereign Debt, and he squirmed just like Bernanke did when asked the same question. Ultimately, Geithner said “GSE debt is not sovereign debt, but it is debt that the United States is going to stand behind”. Sounds like having your cake and eating it too.
Joshua Steiner, CFA