[Deuce]

If I understand it, it sounds awful Orwellian. Is this guy looking for the power to declare a GSE unviable without specifying what concerns he may now have or what basis restrict this power if and when he should want to invoke it.

Or am I missing the meaning entirely. It's not very clear.

[AdamSelene235]

If I understand it, it sounds awful Orwellian. Is this guy looking for the power to declare a GSE unviable without specifying what concerns he may now have or what basis restrict this power if and when he should want to invoke it.

Falcon recently authored a report on systemic risk (see my links) at the GSEs. In it he describes a scenario in which the GSEs could take down the entire financial system via their counterparties.

Now he's just asking for the authority to part them out in the event they fail.

Naturally since bureacrats are a far-sighted, pro-active bunch, who never ever close the barn door after the horse has left, this proposal is a pure theoretical exercise with no relation to the thinly capitalized, opaque and extraordinarily indebted GSEs.