The Federal Reserve, I think, was one of the more vocal commenters on Fannie and Freddie for many years, and we were very concerned about their stability and whether they had enough capital to support those large portfolios that they had, and it turned out they didn't, and we're paying the cost of that right now.
We would not support -- let me be careful. I think we would be very cautious about supporting a return to the existing structure, where you have this potential conflict between private shareholders and the public objectives.
I think there are alternatives, and I provided some of them in a speech I gave a year and a half ago -- I'd be happy to provide you -- which would be a more stable long-term solution, including either a privatization approach with government guarantees or a public utility approach. Those are two options that you could consider.
From the House Q&A session on Wednesday
I think there that returning to a more market-oriented financial sector is a top priority, and we are, in fact, doing that. For example, all the big banks have now paid back their TARP money, and we are trying as quickly as we can to get those banks financed by private capital, which they have raised a great deal of private capital. It's very important. AIG, of course, is very problematic, but they are selling off assets in order to pay us back, and they're making progress on that. And our objective there, of course, is to put them back in the private sector.
We talked earlier about Fannie and Freddie, and I do think that we have to get away from this neither fish nor fowl situation where they're part-public, part-private. I think, you know, one solution would be to privatize those firms, and I think that's an interesting direction to go.
From the Q&A session in the Senate on Thursday