Sunday’s dramatic intervention by the US government in Fannie Mae and Freddie Mac has two key objectives: to bring down mortgage rates and ease financial market stress by making it clear that debt securities issued by these firms are safe since the US government will not allow either of them to fail.

To achieve this the government unleashed a triple salvo of support. First, it will provide capital injections of up to $100bn for each company to ensure they retain positive net worth and can continue to honour their debts, on what a US official called a “pay as you go as needed” basis.