Fannie Mae and Freddie Mac

Happy Friday!

On this day, July 14th, 2008, the US Treasury and Federal Reserve unveiled sweeping steps to possibly bail out the nation’s two largest mortgage lenders, Fannie Mae and Freddie Mac. Treasury Secretary Henry Paulson said that the government would inject billions of federal dollars into the mortgage groups and pledged to buy stakes in the two companies should market conditions worsen. Both companies’ shares had been under increasing pressure and had lost as much as 80% of their value in the previous 12 months. Fannie and Freddie are government-sponsored enterprises (GSEs) that play a significant role in the mortgage market in the United States. Historically, they have been subject to various regulations imposed by the government. One such regulation was the restriction on the purchase of high-risk mortgages, but in the years leading up to the 2008 financial crisis, there was a significant expansion of risky lending practises in the mortgage industry, including the widespread issuance of subprime mortgages, which Fannie Mae and Freddie Mac participated in.

Early in April 2007, Treasury Secretary Henry Paulson stated that “I don't see subprime mortgage market troubles imposing a serious problem. I think it's going to be largely contained.” The 2008 financial crisis that led to the bailout was fuelled by a combination of factors such as subprime mortgage lending, lax regulatory oversight, weak leadership, and flawed risk management practices. Financial institutions and banks were driven by greed as they pursued risky financial practices and engaged in unethical behaviour to maximise their profits. They took advantage of lax regulations and engaged in predatory lending practices, offering subprime mortgages to individuals who were unlikely to be able to repay them. These institutions then packaged these high-risk mortgages into complex financial products and sold them to investors, further fuelling the crisis. Change Leaders Embody Ethics.

“Ethics are a timeless behaviour that all change leaders model”

The change leaders’ second responsibility is to model the new way, especially the new skills and behaviours. They must uphold high standards, even when their peers have different or lower ones. It can be tempting to neglect ethical conduct when no one is watching, succumbing to self-indulgence or greed. Modelling the new way is the one key task leaders of change do not need props for, nor should they delegate this to others.

Have a fantastic weekend with the ones you love and care for, enjoy some fresh air, exercise, eat, drink and be happy.

Further Reading: Change Management Leadership: Leadership of Change Volume 4

Peter consults, speaks, and writes on the Leadership of Change^®. He advises CEOs on how to prepare and align their corporate leadership teams to successfully lead their organisation's change.

For further reading please visit our websites: https://www.a2b.consulting  https://www.peterfgallagher.com Amazon.com: Peter F Gallagher: Books, Biography, Blog, Audiobooks, Kindle

Leadership of Change® Body of Knowledge Volumes: Change Management Body of Knowledge (CMBoK) Books: Volumes 1, 2, 3, 4, 5, 6, 7, A, B, & C available on both Amazon and Google Play:

~ Leadership of Change® Volume 1 - Change Management Fables

~ Leadership of Change® Volume 2 - Change Management Pocket Guide

~ Leadership of Change® Volume 3 - Change Management Handbook

~ Leadership of Change® Volume 4 - Change Management Leadership

~ Leadership of Change® Volume 5 - Change Management Adoption

~ Leadership of Change® Volume 6 - Change Management Behaviour

~ Leadership of Change® Volume 7 - Change Management Sponsorship

~ Leadership of Change® Volume A - Change Management Gamification - Leadership

~ Leadership of Change® Volume B - Change Management Gamification - Adoption

Coming soon:

~ Leadership of Change® Volume C - Change Management Gamification - Behaviour

~ Leadership of Change® Volume D - Change Management Gamification - Sponsorship

~ Leadership of Change® Volume E - Change Management Gamification - Leadership Teams

By Peter F Gallagher

Keywords: Business Strategy, Change Management, Leadership