ROFL...who is Bernanke kidding ?

Question -
"A central bank normally holds sovereign debt, so as to avoid counterparty risk; does the Federal Reserve view mortgage-backed securities as sovereign debt?"


Bernanke replied:


"The Federal Reserve's holding of mortgage-backed securities (MBS) are not equivalent to sovereign debt, but they are fully guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae, and thus pose essentially no credit risk to the Federal Reserve."

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