Financial Times FT.com

Economy & Fed

Priority is to prevent crisis of liquidity

By Krishna Guha in Washington

Published: July 15 2008 00:46 | Last updated: July 15 2008 00:46

To resolve the crisis at Fannie Mae and Freddie Mac policymakers need to address three issues in sequence: liquidity, capital and structure.

Sunday’s announcements by the US Treasury and the Federal Reserve tackle the first issue head on, lay the groundwork for dealing with the second, but do not address the third.

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