18:52 GMT +322 October 2017
Live
    Russia

    U.S. mortgage giants' share drop will not hit Russian state funds

    Russia
    Get short URL
    0 801

    Russia's Finance Ministry gave assurances on Saturday that the tumbling share prices of the two largest U.S. mortgage lenders will not harm Russia's Reserve and National Prosperity funds.

    MOSCOW, July 12 (RIA Novosti) - Russia's Finance Ministry gave assurances on Saturday that the tumbling share prices of the two largest U.S. mortgage lenders will not harm Russia's Reserve and National Prosperity funds.

    Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation), which account for around half of U.S. home loans, have seen their share prices plunge in recent days amid investor fears of new losses from falling house prices.

    The Russian Finance Ministry said that currently "the resources of the Reserve Fund and the National Prosperity Fund are not invested in the securities of these agencies."

    However, the Russian Central Bank does invest in bonds of the U.S. agencies.

    "In contrast to the share prices of Fannie Mae and Freddie Mac, their bond prices remain stable. This is because the U.S. government has publicly declared its willingness to financially support these companies," the ministry said.

    On Friday, U.S. mortgage lender IndyMac Bancorp Inc. had its assets seized by federal regulators, becoming second-largest financial institution to collapse in U.S. history.

    Russia's Finance Ministry divided the former Stabilization Fund into the Reserve Fund, designed to cushion the federal budget in the event of an oil price plunge, and the National Prosperity Fund, designed to help Russia carry out pension reforms, on February 1 this year.

    Community standardsDiscussion
    Comment via FacebookComment via Sputnik
    • Сomment