Fannie Mae and Freddie Mac, the government-chartered mortgage financiers, yesterday got the go-ahead from their regulator to pump as much as $200bn of liquidity into the beleaguered US mortgage market.

The Office of Federal Housing Enterprise Oversight (Ofheo) reduced surplus regulatory capital requirements for the mortgage companies from 30 per cent to 20 per cent and secured a commitment that they will each soon raise a "significant" amount of new capital to allow them to buy and guarantee more mortgages.