FACTOID # 20: Statistically, Delaware bears more cost of the US Military than any other state.
 Home   Encyclopedia   Statistics   States A-Z   Flags   Maps   FAQ   About 


FACTS & STATISTICS    Advanced view

Search encyclopedia, statistics and forums:



(* = Graphable)



Encyclopedia > Government sponsored enterprise

The government sponsored enterprises (GSEs) are a group of financial services corporations created by the United States Congress. Their function is to enhance the flow of credit to targeted sectors of the economy and to make those segments of the capital market more efficient and transparent. The desired effect of the GSEs is to enhance the availability and reduce the cost of credit to the targeted borrowing sectors: agriculture; home finance; and education. Congress created the first GSE in 1916 with the creation of the Farm Credit System; it initiated GSEs in the home finance segment of the economy with the creation of the Federal Home Loan Banks in 1932; and it targeted education when it chartered Sallie Mae in 1972 (although Congress allowed Sallie Mae to relinquish its government sponsorship and become a fully private institution via legislation in 1995). The residential mortgage borrowing segment is by far the largest of the borrowing segments in which the GSEs operate. Together, the three mortgage finance GSEs (Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks) have several trillion dollars of on-balance sheet assets. Financial services is a term used to refer to the services provided by the finance industry. ... Type Bicameral Houses Senate House of Representatives President of the Senate President pro tempore Dick Cheney, (R) since January 20, 2001 Robert C. Byrd, (D) since January 4, 2007 Speaker of the House Nancy Pelosi, (D) since January 4, 2007 Members 535 plus 4 Delegates and 1 Resident Commissioner Political...



The GSEs have created a secondary market in these loans through securitization so that the primary market debt issues can be bought and—most importantly—traded by investors. Demand for debt securities drives up their trading price, which lowers their interest rates. Proponents say that this secondary market in consumer loans gives household borrowers cheap fixed rate loans (low fixed rates on long term loans), removes credit risk from banks' balance sheets and provides standardized instruments (securitized securities) for investors. The secondary market is the financial market for trading of securities that have already been issued in an initial private or public offering. ... Securitization is a financing process in which a corporate entity moves assets to an ostensibly bankruptcy-remote vehicle to obtain lower interest rates from potential lenders--because the assets cannot be seized in a bankruptcy proceeding, the risk is less for lenders and they are willing to offer a lower... The primary is that part of the capital markets that deals with the issuance of new securities. ... Investment is a term with several closely related meanings in finance and economics. ... Credit risk is the risk of loss due to a debtors non-payment of a loan or other line of credit (either the principal or interest (coupon) or both). ... This article needs additional references or sources for verification. ... Securitization is a financial technique that pools assets together and, in effect, turns them into a tradeable security. ...


Some of the GSEs, such as Fannie Mae and Freddie Mac, are publicly owned; others, such as the Federal Home Loan Banks, are owned by the corporations that use their services. Their lenders grant them favorable interest rates, and the buyers of their securities offer them high prices, as the implicit involvement of the Federal government gives them a sense of financial security. A publicly traded corporation often refers to a company whose shares are traded on the open market, such as a stock market. ...

In fact, GSE securities carry no explicit government guarantee.

List of organizations


The Federal Home Loan Banks provide stable, on-demand, low-cost funding to American financial institutions for home mortgage loans, small business, rural, agricultural, and economic development lending. ... The Federal Home Loan Mortgage Corporation (FHLMC) NYSE: FRE, commonly known as Freddie Mac, is a government sponsored enterprise (GSE) sponsored by the United States Government. ... The Federal National Mortgage Association (FNMA) (NYSE: FNM), commonly known as Fannie Mae, is a government sponsored enterprise (GSE) sponsored by the United States government. ...


The Farm Credit System is a network of borrower-owned cooperative lending institutions and related service organizations in the United States serving all 50 states and Puerto Rico. ... Farmer Mac or the Federal Agricultural Mortgage Corporation (NYSE: AGM) is a stockholder-owned, publicly-traded company that was chartered by the United States federal government in 1988 to serve as a secondary market in agricultural loans such as mortgages for agricultural real estate and rural housing. ...

See also

SLM Corporation NYSE: SLM, commonly known as Sallie Mae, is the United States largest college student loan company, managing more than $126. ... The introduction to this article provides insufficient context for those unfamiliar with the subject matter. ... The controversy in relation to the big three United States mortgage government sponsored enterprises was triggered by accounting scandals in two of them, which ugred the US government to consider tightening the control over them. ...

External links

  Results from FactBites:
Government sponsored enterprise - definition of Government sponsored enterprise in Encyclopedia (261 words)
A government sponsored enterprise (GSE) is the unofficial name of a group of financial services corporations created by the United States Congress.
The GSEs have created a secondary market in these loans through securitization so that these primary market issues can be bought and most importantly, traded, by investors.
None of the GSEs are government owned anymore, some of them are publicly owned, some are owned by the corporations that use their services.
EH.Net Encyclopedia: The United States Public Debt, 1861 to 1975 (5242 words)
The government is partially or, more precisely, contingently liable for the debt of government-sponsored enterprises for which it has pledged its guarantee.
During the period 1861 to 1975, the debt for which the government could be partially or contingently liable has included that of government-sponsored enterprises, railroads, insular possessions (Puerto Rico and the Philippines), and the District of Columbia.
The change that occurred between 1861 and 1975 was the attitude among the government and the public toward budget deficits.
  More results at FactBites »



Share your thoughts, questions and commentary here
Your name
Your comments

Want to know more?
Search encyclopedia, statistics and forums:


Press Releases |  Feeds | Contact
The Wikipedia article included on this page is licensed under the GFDL.
Images may be subject to relevant owners' copyright.
All other elements are (c) copyright NationMaster.com 2003-5. All Rights Reserved.
Usage implies agreement with terms, 1022, m