mr. chairman , i yield myself the balance of my time . 
mr. chairman , i rise today in support of this amendment dealing with systemic risk to h.r. 1461 , the legislation to reform oversight of the nation 's three housing gses . 
i think most people would assume that congress would and should create a regulator with the authority to protect the broader financial system with respect to systemic risk , especially in light of the warnings of systemic risk from the federal reserve and the treasury , the $ 1.5 trillion of mortgage assets concentrated in just two companies , the special ties the gses have with the federal government , and the over- $ 2 trillion in gse debt . 
unfortunately , the fact of the matter is that h.r. 1461 fails to give the regulator the authority to protect the financial system against a potential shock that would seriously undermine the u.s. housing market and the global financial system . 
i have just spoken with alan greenspan 's office this afternoon , and they totally reject the argument that the regulator has this ability to take into account the systemic risk and take the necessary actions in the bill ; and also the bush administration disagrees with that assertion . 
they think it is not in there . 
furthermore , if the authority is already in the bill , what is wrong with my additional 14 words stating it explicitly . 
let me also make the point that my amendment would allow the regulator to review the investment holdings of fannie mae and freddie mac , and this authority is necessary because the huge concentration of on-balance sheet assets of fannie mae and freddie mac create too much interest rate risk , in other words , too much exposure to swings in interest rates in the hands of only a few risk managers . 
the traditional mortgage guarantee business model at fannie mae and freddie mac provides liquidity in the mortgage market and helps homeownership without increasing risk to the taxpayer . 
however , the enterprises ' on-balance sheet mortgage assets only benefit fannie and freddie shareholders at the expense of the taxpayer . 
taking into account the unequaled levels of debt outstanding and the unprecedented use of derivatives to manage interest rate risk at the enterprises , the federal reserve and the treasury department believe that the on-balance sheet mortgage assets of the two enterprises create systemic risk to the global financial markets . 
mr. chairman , congress failed to rein in the savings and loan industry in the early 1980s . 
that failure led to hundreds of billions of dollars in taxpayer losses . 
today , however , congress has been forewarned by the fed , the treasury , the oecd , and the imf . 
i would like to end debate on this amendment with the words of our distinguished chairman of the federal reserve , alan greenspan , who has publicly urged the house of representatives to defeat h.r. 1461 unless the threat of systemic risk is addressed . 
he said : `` to fend off possible future systemic difficulties , which we at the federal reserve board assess as likely if gse expansion continues unabated , preventative actions are required sooner rather than later. '' i urge my colleagues to support this amendment . 
