Fannie's return on equity over the past five years has varied from a low of 20.9 percent in 1995 to a high of 25.3 percent in 1993, while Freddie's has been around the 20 percent mark all five years. Fannie appropriately is proud of its record. We are proud of our 11 record years of double-digit increases in operating earnings per common share. One of the reasons for these astounding figures is that both Fannie and Freddie are holding a greater share of mortgages for their own investment purposes. Rather than simply bundling mortgages, as anticipated in their charters, to be sold to a tertiary market, Fannie and Freddie have increasingly become national savings and loans.
All commercial enterprises face risk.
For private financial institutions, it may be principally credit risk, or perhaps interest rate risk. But not GSEs. The principal risk for a GSE is thus political risk. Given this circumstance, GSEs spend more time, effort and money establishing and keeping good relations with Congress and the Executive Branch than any other institutions in the country. And because of the job they do on the Hill, as well as in the social policy field they fulfill, it is exceedingly unlikely that substantial charter revision will be undertaken in the foreseeable future.