Fed will lend to Fannie and Freddie

The Federal Reserve has authorised the New York Federal Reserve to lend to Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that insure half of the US's home loans.

The two mortgage insurers, which provide guarantees for about $5.2 trillion-worth of US home loans, will be able to access discount-window financing if necessary, the Fed said on Sunday in a statement preceding the opening of Asian stock exchanges after shares in the GSEs slumped last week.

Any lending wi