WASHINGTON - Federal Reserve Board Chairman Alan Greenspan has repeated his concerns that Fannie Mae and other government-sponsored enterprises enjoy implicit government subsidies and called for further congressional debate on the issue.

In a letter released Tuesday, Mr. Greenspan said that "to the extent that the subsidy is not fully passed on in lower mortgage rates, GSE profits rise and shareholders benefit."

The letter - sent to Rep. Richard H. Baker Aug. 25 in preparation for a meeting next week on the Louisiana Republican's bill to strengthen oversight of Fannie and Freddie Mac - added that taxpayers and holders of the enterprises' bonds could be at greater risk if government subsidies let Fannie and Freddie hold less capital.

A widely held belief asserts that the government would not let these institutions, or other, similar enterprises, fail even if this is not spelled out in law, the Fed chief wrote.

Mr. Greenspan stopped short of making any policy recommendation on how to minimize the impact of the subsidy. Instead he stated that "it is important for them to be subject to the congressional oversight process."

In response, Rep. Baker called for the Congressional Budget Office to research how much of the purported subsidy is passed on to homebuyers.

Fannie chairman and chief executive Franklin D. Raines argued in an Aug. 25 letter to Rep. Baker that his proposal to repeal the enterprise's line of credit "would disrupt the capital markets and inexorably lead to higher mortgage rates for consumers."

Mr. Raines' letter said Fannie goes to great lengths to minimize and share risk with investors.

Rep. Baker, chairman of the House Banking subcommittee on capital markets and government-sponsored enterprises, plans a public meeting next Tuesday on his bill.

It would repeal the $2.25 billion Treasury Department lines of credit to both Fannie and Freddie, as well as the $4 billion line for the Federal Home Loan banks, and it would put oversight of the government-sponsored enterprises in the hands of a new, more powerful agency.

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