Greenspan on risk transfer and financial stability

In a speech on 'Risk transfer and financial stability' given on 5 May, Alan Greenspan of the Federal Reserve said the huge mortgage holdings of home finance giants Fannie Mae and Freddie Mac pose risks to the liquidity of the derivatives market where companies hedge interest rates.

"Concerns about potential disruptions to swaps market liquidity will remain valid until the vast leveraged portfolios of mortgage assets held by Fannie and Freddie are reduced and the associated concentrations of

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