Testifying before the House Banking Committee last week, U.S. Rep. Richard Baker (R., La.) said he wants the President's Working Group on Financial Markets to take a look at pending legislation to reduce risks posed to the financial markets.

While Baker suggested that OTC derivatives and hedge funds deserve further exploration, he spoke at length on the risks of agency securities - those of Fannie Mae, Freddie Mac and the Federal Home Loan Banks System. He has sponsored a bill - HR 3703 - to strengthen the regulation of the agencies.

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