Franklin Raines's Five Rules For Fixing the Economy
No one really asked him, but former Fannie head Franklin Raines just offered the House Oversight committee Frank's Five Rules for Fixing the Economy:
1. The government must provide financing to the system, which is "frozen up," he said.
2. Good assets must be separated from bad assets, and institutions must be recapitalized.
3. Those bad assets must be worked out. "An empty house overnight can become worthless. To me it's a crime that [the government] is not investing funds to keep people in their houses," he said.
4. There needs to be more extensive regulation of big, leveraged financial entities, be they Fannie and Freddie, banks or hedge funds.
5. There need to be regulations to protect consumers. "There's no way consumers can understand the documents placed in front of them when they sign a mortgage," Raines said.
December 9, 2008; 11:39 AM ET
Categories: The Ticker | Tags: Fannie, Franklin Raines, Freddie
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