CHAPTER 16Baseless Demand, Fateful Results

ON SEPTEMBER 27, 2004, THE FANNIE MAE BOARD ENTERED INTO a written agreement with OFHEO that addressed a number of the issues raised in the interim report presented to it the week before. The eight-page document included items on accounting, capital, organization, and corporate governance. Among them was the requirement that “[the Fannie Mae] Board shall direct the appointment of a chief risk officer, to be independent of other corporate responsibilities and to have duties crafted in consultation with OFHEO.”

Adding a Chief Risk Officer Adds Risk

The appointment of a chief risk officer echoed a recommendation OFHEO had made for Freddie Mac. In its special examination of that company, OFHEO claimed that ...

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