Central bankers back Fannie and Freddie takeover

Central bankers worldwide have endorsed the US Treasury's de-facto nationalisation of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSE) that insure about half of the US's mortgage stock.

Hank Paulson, the US Treasury Secretary announced what he termed a "conservatorship" of the enterprises on Sunday. Under the arrangement the enterprises will "modestly increase" their holdings of mortgage-backed securities through 2009 in a bid to kick start a housing-market recovery.

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