--- title: "Meaning & Key Takeaway of: RE: GSEs like Freddie Mac & Fannie Mae…" description: "\"RE: GSEs like Freddie Mac & Fannie Mae: \"creditors will continue to underprice the risk-taking of these financial institutions, overfund them, and fail..." image: "https://sms4smile.com/quotes/i/eed/gary-h-stern-238990_creditors_re-gses-like-freddie-mac-fannie-mae-cred_3018840.png" --- # RE: GSEs like Freddie Mac & Fannie Mae: "creditors will… ![“RE: GSEs like Freddie Mac & Fannie Mae: "creditors will continue to underprice the risk-taking of these financial institutions, overfund them, and fail to provide effective market discipline Facing prices that are too low, systemically important firms will take on too much risk."” quote by Gary H. Stern](https://sms4smile.com/quotes/i/eed/gary-h-stern-238990_creditors_re-gses-like-freddie-mac-fannie-mae-cred_3018840.png) [Download](https://sms4smile.com/quotes/i/eed/gary-h-stern-238990_creditors_re-gses-like-freddie-mac-fannie-mae-cred_3018840.png) [Open image](https://sms4smile.com/quotes/i/eed/gary-h-stern-238990_creditors_re-gses-like-freddie-mac-fannie-mae-cred_3018840.png) > “RE: GSEs like Freddie Mac & Fannie Mae: "creditors will continue to underprice the risk-taking of these financial institutions, overfund them, and fail to provide effective market discipline Facing prices that are too low, systemically important firms will take on too much risk."” Gary H. Stern ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Creditors undervalue risk, leading to over‑funding and weak market discipline. **In simple terms:** Creditors underprice risk, causing excess funding and poor discipline. Key Takeaway Enforce realistic risk pricing and discipline. Themes Finance Risk Credit Market discipline Regulation Mood analytical critical Type policy analytical When to use this quote - Banking - Policy‑ - Investment - Risk management Key Concepts Moral hazard Systemic risk Pricing models Questions to Reflect On - How can regulators improve risk assessment? - What incentives align creditor behavior with true risk? A Different Perspective Market forces may correct pricing without intervention. ★ ★ ★ ★ ★ No ratings yet [Creditors](https://sms4smile.com/quotes/about/creditors/) [Discipline](https://sms4smile.com/quotes/about/discipline/) [Economics](https://sms4smile.com/quotes/about/economics/) [Financial institutions](https://sms4smile.com/quotes/about/financial-institutions/) [Institutions](https://sms4smile.com/quotes/about/institutions/) [Philosophy](https://sms4smile.com/quotes/about/philosophy/) [Political](https://sms4smile.com/quotes/about/political/) [Risk](https://sms4smile.com/quotes/about/risk/) [Risk taking](https://sms4smile.com/quotes/about/risk-taking/) ## Related quotes > [And so Fannie Mae produces very strong results for investors in - when interest rates are high and when interest rates are low, in…](https://sms4smile.com/quotes/franklin-raines/and-so-fannie-mae-produces-very-strong-results-for-investors-in-when/) [Franklin Raines](https://sms4smile.com/quotes/author/franklin-raines/) > [The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest…](https://sms4smile.com/quotes/nassim-nicholas-taleb/the-government-sponsored-institution-fannie-mae-when-i-look-at-its/) [Nassim Nicholas Taleb](https://sms4smile.com/quotes/author/nassim-nicholas-taleb/) > [One third of the $15 trillion of mortgages in existence in 2008 are owned, or securitized by Fannie Mae, Freddie Mac, Ginnie Mae, the…](https://sms4smile.com/quotes/walter-e-williams/one-third-of-the-15-trillion-of-mortgages-in-existence-in-2008-are/) [Walter E. 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I was chairman of…](https://sms4smile.com/quotes/j-c-watts/well-mark-i-led-the-charge-for-five-or-six-years-to-get-reforms-for/) [J. C. Watts](https://sms4smile.com/quotes/author/j-c-watts/) > [These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,](https://sms4smile.com/quotes/barney-frank/these-two-entities-fannie-mae-and-freddie-mac-are-not-facing-any-kind-2/) [Barney Frank](https://sms4smile.com/quotes/author/barney-frank/) > [These two entities Fannie Mae and Freddie Mac are not facing any kind of financial crisis. The more people exaggerate these problems, the more…](https://sms4smile.com/quotes/barney-frank/these-two-entities-fannie-mae-and-freddie-mac-are-not-facing-any-kind/) [Barney Frank](https://sms4smile.com/quotes/author/barney-frank/) > [Fannie Mae has never publicly disclosed how much money it could lose if interest rates rose 1.5 percentage points in a very short period…](https://sms4smile.com/quotes/alex-berenson/fannie-mae-has-never-publicly-disclosed-how-much-money-it-could-lose/) [Alex Berenson](https://sms4smile.com/quotes/author/alex-berenson/) > [Although not well known outside Wall Street, Freddie Mac and its corporate cousin, Fannie Mae, are two of the world's largest financial institutions and…](https://sms4smile.com/quotes/alex-berenson/although-not-well-known-outside-wall-street-freddie-mac-and-its/) [Alex Berenson](https://sms4smile.com/quotes/author/alex-berenson/) > [The Great Bailout is mostly over for the banks. But for those troubled behemoths of the nation's housing bust, Fannie Mae and Freddie Mac,…](https://sms4smile.com/quotes/charles-duhigg/the-great-bailout-is-mostly-over-for-the-banks-but-for-those-troubled/) [Charles Duhigg](https://sms4smile.com/quotes/author/charles-duhigg/) > [Fannie Mae has traditionally only bought and sold mortgages. But when a loan held by the company goes into foreclosure, Fannie Mae gains ownership…](https://sms4smile.com/quotes/charles-duhigg/fannie-mae-has-traditionally-only-bought-and-sold-mortgages-but-when/) [Charles Duhigg](https://sms4smile.com/quotes/author/charles-duhigg/) > [Analysts say that one reason Fannie Mae and Freddie Mac were privatized in the first place was to prevent political whims from dominating the…](https://sms4smile.com/quotes/charles-duhigg/analysts-say-that-one-reason-fannie-mae-and-freddie-mac-were/) [Charles Duhigg](https://sms4smile.com/quotes/author/charles-duhigg/) ## More Creditors quotes > [Much of what Germany and France have done in the rescue of Greece has also helped German and French banks, who for a long…](https://sms4smile.com/quotes/mario-monti/much-of-what-germany-and-france-have-done-in-the-rescue-of-greece-has/) [Mario Monti](https://sms4smile.com/quotes/author/mario-monti/) > [Faith is like private capital, stored in one's own house. 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It's running into creditors that hurts](https://sms4smile.com/quotes/anonymous/running-into-debt-isn-t-so-bad-it-s-running-into-creditors-that-hurts/) [Anonymous](https://sms4smile.com/quotes/author/anonymous/) > [The stomach begs and clamors, and listens to no precepts. And yet it is not an obdurate creditor; for it is dismissed with small…](https://sms4smile.com/quotes/seneca-the-younger/the-stomach-begs-and-clamors-and-listens-to-no-precepts-and-yet-it-is/) [Seneca the Younger](https://sms4smile.com/quotes/author/seneca-the-younger/) > [Creditors have better memories than debtors.](https://sms4smile.com/quotes/benjamin-franklin/creditors-have-better-memories-than-debtors/) [Benjamin Franklin](https://sms4smile.com/quotes/author/benjamin-franklin/) > [Every American born today owes $43,000 to the federal government the day she or he is born. And we are transferring a tremendous amount…](https://sms4smile.com/quotes/mark-kirk/every-american-born-today-owes-43-000-to-the-federal-government-the/) [Mark Kirk](https://sms4smile.com/quotes/author/mark-kirk/) > [ I sympathize the first, the direct and single-minded attack \[Red Revolution\]. I believe it to have been necessary and inevitable in Russia. It may… ](https://sms4smile.com/quotes/stuart-chase/i-sympathize-the-first-the-direct-and-single-minded-attack-red/) [Stuart Chase](https://sms4smile.com/quotes/author/stuart-chase/) [Browse all 122 Creditors quotes ](https://sms4smile.com/quotes/about/creditors/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "RE: GSEs like Freddie Mac & Fannie Mae: \"creditors will continue to underprice the risk-taking of these financial institutions, overfund them, and fail to provide effective market discipline Facing prices that are too low, systemically important firms will take on too much risk.\"", "creator": { "@type": "Person", "name": "Gary H. 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