ABA Asks Protection for Banks Owning GSE Stock
When the two government sponsored enterprises (GSEs) were originally
placed in conservatorship on September 7, federal
regulators estimated that only a few dozen banks were holding preferred
paper in the institution. However, the ABA survey has found that about 27
percent of banks are preferred stockholders and another 3-1/2 percent own
auction-rate securities that are backed by preferred stock. For those
banks which are preferred stockholders, the average
core capital is 11 percent.
In its letter on September 22 the ABA requested that
the government take six actions to resolve the preferred stock
situation:
Original post by Mortgage News Daily - Mortgage And Real Estate News
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