After financial reform, GSEs should be the next sector dealt with, said Federal Deposit Insurance Corp. (FDIC) Chair Sheila Bair  at the University of Pennsylvania today. Text of her speech follows:

Since the 1930s, the federal government has played a major role in facilitating the development of a strong secondary market for mortgage loans. Through the Federal Housing Administration (FHA) and the government-sponsored enterprises, the government has directly or indirectly provided credit guarantees that have promoted the origination and securitization of mortgage loans that conform to certain standards and size limits.

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