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Prof. Lawrence White Testifies Before the US House on the Present and Future of Fannie and Freddie

On Wednesday, June 3, Lawrence White, Professor of Economics and Deputy Chair of the NYU Stern Economics Department, testified before the US House of Representatives Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, Committee on Financial Services.

Professor White stated that the hybrid private-public model that was at the heart of Freddie Mac and Fannie Mae is clearly broken and should not be reconstructed. Instead, after the current financial crisis has receded, both companies should be truly privatized, with all ties to the federal government severed. To replace their implicit broadbrush effects in the US housing markets, targeted programs that provide explicit on-budget subsidies to encourage low- and moderate-income households to become first-time home buyers should be expanded.

Professor White has been at NYU Stern for more than 30 years. His primary research areas of interest include financial regulation, antitrust, network industries, international banking and applied microeconomics. During 1986-1989, he served as a Board Member on the Federal Home Loan Bank Board, in which capacity he also served as a Board Member of Freddie Mac.

Read Professor White's Complete Testimony>>