A State of Risk: Will Government Sponsored Enterprises be the Next Financial Crisis?

Hardcover: 225 pages
Publisher: HarperCollins (April 1991)
Language: English
ISBN-10: 0887304192
ISBN-13: 978-0887304194

REVIEW
There are few books more helpful in understanding the issues behind the current discussion of the future of Freddie Mac and Fannie Mae than Thomas Stanton’s book: A State of Risk: Will Government-Sponsored Enterprises (GSEs) Be the Next Financial Crisis? The book is well researched and Tom writes from the perspective of one actively involved in the Congressional debate over reform and regulation of GSEs. This book is a classic in public administration and it deserves to be updated in view of the more recent history.

The book is organized into these chapters:

1. Introduction: GSEs and Thrift Institutions.
2. The Hidden Costs and Public Benefits of GSEs.
3. How GSEs work.
4. Enterprises in the Marketplace.
5. The Politics of Enterprise Lending.
6. Enterprises as Private Financial Institutions.
7. The Implicit Federal Guarantee as a Source of Risk Exposure.
8. Supervising Enterprise Safety and Soundness.
9. Enterprise Accountability.
   Appendices: Law, Cases, and Other Legal Sources on GSEs.

“…perhaps the most effective advocate for safety and soundness regulation has been a private individual: Thomas Stanton…Stanton’s 1991 book State of Risk and his personal lobbying were influential in the legislative process leading to the passage of the [1992 Federal Housing Enterprises Financial Safety and Soundness Act].”
Professor Jonathan G.S. Koppell, The Politics of Quasi-Government, Cambridge University Press, 2003, p. 107.