Call of duty

Fannie Mae and Freddie Mac have been given the task of keeping the mortgage-backed securities market in business, with the help of the Federal Home Loan Banks. But there is concern the government-sponsored enterprises may be sacrificing their balance sheets at the behest of the US Congress. Peter Madigan reports

Liquidity has been the focus of regulatory attention on both sides of the Atlantic over the past nine months. The Federal Reserve, Bank of England and European Central Bank have sought on several occasions to reinvigorate interbank lending by injecting liquidity into the money markets, with varying levels of success.

Not surprisingly, the US mortgage market - the sector that spawned the credit funk now crippling the financial industry - has been particularly hard hit. Would-be homeowners with