Book description
This book examines the role of Fannie Mae, Freddie Mac and other key
players in the American mortgage market, in precipitating the current
global financial crisis. From President Clinton's announcement of the
'National Home Ownership Strategy' in 1995 to its collapse in 2008, this
book deftly explains the aims and consequences of extending mortgage
lending to people who could not afford home ownership. Bankers,
investment banks, rating agencies and derivatives have all been awarded
their share of the blame, while politicians, regulators and government
agencies have successfully avoided theirs. Fannie Mae and Freddie Mac
have been implicated, but the true story of their marriage made in hell
has never been told. It is astonishing and somewhat unsettling that
the best scholarly work about Fannie Mae and Freddie Mac and their role
in the 2008 financial crisis should have produced by Oonagh McDonald, a
British student of the financial markets. The book is doubly useful
because Ms McDonald cannot be accused of bias on an issue that has
become excessively politicized in the US. If you want to know how US
government housing policy led to the financial crisis, it is in these
pages. -- Peter J. Wallison, Arthur F. Burns Fellow In Financial Policy
Studies, American Enterprise Institute, USA Finally, an accurate
portrayal of the causes of the 2008 financial crisis... Ms. McDonald
lays out how good intentions and contributory negligence of political
power-players converted the American Dream from a reward for hard work
into an entitlement for those who failed. -- Louis S. Harvey, President,
Dalbar, Inc. USA More than any book I have read on the financial crisis,
this captures the perils of politically driven lending. Oonagh McDonald
shows how ideology, in this case a misplaced belief that home ownership
is always good, deterred both public scrutiny of Fannie Mae and Freddie
Mac and market discipline. Supposed regulators became cheer-leaders and
executives lined their pockets in the name of the American dream. And it
remains unclear whether the monsters at the heart of the sub-prime
crisis - now in state care - will be killed off, as this book rightly
suggests they should be. -- Jane Fuller, Co-Director Of The Csfi (Centre
For The Study Of Financial Innovation) Think-Tank And Former Financial
Editor Of The Financial Times The collapse of Fannie Mae and Freddie Mac
was a crucial part of the Great Meltdown in financial markets. Dr
McDonald has now traced with great care and accomplished expertise the
story behind this saga. Her meticulous research and her clarity in
telling the story will be a great help to all readers in understanding
what happened and why. I recommend this book highly to all who are in
any way interested in the events of the Great Meltdown. -- Professor
Meghnad Desai, London School Of Economics And Political Science, UK
There could be no better guide through the sub-prime crisis which
triggered the great financial and economic collapse of 2008 than Oonagh
McDonald. She possesses all the gifts - financial acumen and experience,
an insider's knowledge of politics and government and the forensic
talents of a top flight scholar. This book will endure as long as the
fall of Fannie Mae and Freddie Mac is remembered -- Professor Peter
Hennessy, Queen Mary, University Of London, UK A serious study and done
in enough depth to appeal to academics and researchers but ...
accessible enough to appeal to the general public given the obvious
importance of the topic. Her practical knowledge of politics and
financial services is very illuminating throughout. Thorough and
interesting and written with very perceptive insights from an
experienced politician and regulator. -- Professor Robert Hudson,
Newcastle University Business School, UK From any perspective the
current financial crisis should interest both practitioners and
academics, there is much to learn and digest, and Oonagh's book will
provide invaluable insights for many generations to come. It is highly
readable and contains a wonderful blend of thorough scholarship and a
detailed appreciation of the intertwining of politics and markets.
Oonagh has laid bare the root causes of the subprime crisis and she
highlights the dangers of politicians interfering in markets they do not
understand. This is a thought provoking book and a timely reminder that
markets and their specific politics always need close scrutiny if untold
costs are to be avoided. -- Professor Kevin Keasey, Head Of Accounting
And Finance, Leeds University Business School, UK Oonagh McDonald is a
former UK Member of Parliament, a board member of the Financial Services
Authority, an international regulatory expert and the author of several
books, including Retail Banking in Europe: a view from the top (2002).
As a director of various companies and regulatory bodies, she has
in-depth experience of financial regulation, and was awarded the CBE in
1998 for her contribution to financial regulation and business.
