Government Sponsored Enterprises: Mercantilist Companies in the Modern World

Government Sponsored EnterprisesHardcover: 139 pages
Publisher: Aei Press (January 1, 2002)
Language: English
ISBN-10: 0844741604
ISBN-13: 978-0844741604

Among the small fraternity of analysts that follow Government-Sponsored Enterprises (GSE’s), Thomas Stanton is well-known and respected. According to Stanton, a GSE is “a GSE is a privately owned, federally-chartered financial institution with nationwide scope and specialized lending powers that benefits from an implicit federal guarantee of all its obligations to enhance its ability to borrow money” (pp. 1-2). The six GSEs are: Fannie Mae, Freddie Mac, Farmer Mac, Sallie Mae (until it gave up its GSE status in 2004), the Farm Credit System, and the Federal Home Loan Banking System. His book “is about the institutional design and the structure of the GSE as a special type of institution authorized, defined, and shaped by law” (p. xiii).

While much of what Stanton writes about in this book is well-known in the fraternity of GSE analysts, few others are privy to these insights. The background on these institutions is mostly chronicled in law, the federal register, and studies commissioned by Congress that most people would find inaccessible. Occasionally, newspaper and magazine articles and technical studies appear that provide insights. The problem is that many of the studies and reports that appear are commissioned by the GSEs themselves, their supporters, and detractors. It can accordingly be difficult at times to separate objective information from other materials. Stanton’s contribution is that he provides a coherent overview of the GSEs as institutions.

A book review in Public Budgeting & Finance calls this book “authoritative” and “an indispensable tool for the public finance professor,” winter 2003, pp. 114-116

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