Bernanke: Freddie, Fannie are Fine

time.com — Federal Reserve Chairman Ben Bernanke told the House Financial Services Committee that mortgage giants Fannie Mae and Freddie Mac are "adequately capitalized" and in "no danger of failing." The two companies hold or guarantee more than $5 trillion in mortgages — almost half of the nation's total. The Bush administration is asking Congress to temporarily increase lines of credit to Fannie and Freddie and to let the government buy their stock. The Fed has offered to let the companies draw emergency loans. The pledges of aid have raised concerns about the government's role in bailing out financial institutions while passing the risk on to taxpayers. The companies' shares have plunged as losses from their mortgage holdings threatened their financial survival.

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