Federal Reserve Chairman Alan Greenspan urged Congress Wednesday to limit the size of the massive portfolios held by Fannie Mae and Freddie Mac, saying it was vital to cut the risks the mortgage finance giants pose to the U.S. financial system.
In testimony prepared for delivery to the Senate Banking Committee, Greenspan said stiffer regulation alone could worsen the risks the two government-sponsored enterprises pose.
“World class regulation, by itself, may not be sufficient,” Greenspan said.
