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FHFA seeks to improve Fannie Freddie exam system
WASHINGTON (6/20/12)—The Federal Housing Finance Agency (FHFA) has asked for public comment on proposed changes to how examiners assess the financial well-being of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and various Federal Home Loan Banks (FHLBs).

Under the proposed examination rating system, Fannie Mae, Freddie Mac, the Federal Home Loan Banks and their respective finance offices would be judged on their capital, asset quality, management, earnings, liquidity, sensitivity to market risk, and operational risk. The GSEs and FHLBs would be assigned a rating of one to five for each of these categories, with a score of one indicating little to no risk and a score of five indicating a high risk.

A composite rating would be created from these seven individual rating categories. The FHFA said, however, that the relative importance of each rating component "would be determined on a case-by-case basis."

The FHFA said the new system would be adopted on Jan. 1, 2013, if a final version is approved.

Comments on the proposed rating framework will be accepted until July 19.

The FHFA currently uses the Federal Home Loan Bank's examination framework.
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