This week, America's Congress began hearings on the regulation of the country's two mortgage giants, Freddie Mac and Fannie Mae. Richard Baker, chairman of the relevant committee and a long-time critic of both companies, declared on June 24th that the present watchdog, an obscure body called the Office of Federal Housing Enterprise Oversight (OFHEO), is not up to the job. Better, he thinks, to hand the task to the part of the Treasury that supervises thrifts (building societies). He is not fussy about details, he says: all that matters is that Fannie and Freddie be scrutinised by a regulator with real authority, independent funding and competence.
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