CHICAGO — Each May the Federal Reserve Bank of Chicago pulls in financial services policy experts from around the globe for its Bank Structure Conference. This year’s big draw was the prospect of a showdown over the government’s backing of the powerful, prodigious, and profitable Fannie Mae and Freddie Mac.

The two-day event was expected to feature Congressional Budget Office staffers discussing their long-awaited estimate of the benefits the two government-sponsored enterprises get from their charters, including how much of this money is passed on to homeowners and how much ends up in shareholders’ pockets.

But without explanation, the CBO officials were scratched and Rep. Richard H. Baker stepped in as a last-minute speaker. Conferees were buzzing — and changing their return flights — because surely the Louisiana Republican would not fly to Chicago to speak at 3:15 Friday if he didn’t have a bombshell to drop.

But Rep. Baker, who has led a lonely campaign against Fannie and Freddie for more than a year, disappointed, devoting the bulk of his remarks to outlining his agenda as chairman of Financial Services’ capital markets subcommittee.

Still the GSE issue — including the size of the government’s subsidy, the risk of systemic effects should Fannie or Freddie falter, and the quality of GSE oversight — dominated the Q&A period.

Rep. Baker said CBO Director Dan Crippen would release the subsidy estimates at a May 23 capital markets subcommittee hearing. In an interview after his speech, Rep. Baker said he still thinks the subsidy will be in the $10 billion range, but he said the study’s methodology was overhauled to avoid the criticism leveled against the 1996 report, which put the subsidy at $6.5 billion.

Rep. Baker said he would have plenty of questions for Mr. Crippen, the lone scheduled witness.

“Does the enterprise meet its charter obligations? If so, at what cost?” he asked in his speech. “The value of the subsidy should be weighed and compared to the cost of achieving the policy goal by other means. If the subsidy is used for purposes other than mission compliance, who gets it and how much do they take?”

While Fannie and Freddie are well run and lucrative today, Rep. Baker said he remains worried about the systemic risks they pose and the enormous losses they could foist on American taxpayers. He has introduced legislation to transfer GSE oversight to the Federal Reserve Board.

“There is no other regulator for which I have higher regard … than the Federal Reserve,” he said.

To bolster his points, Rep. Baker relied heavily on public statements Fed Chairman Alan Greenspan has made about the GSEs; the text of the lawmaker’s speech refers to the central banker seven times and Fed Governor Laurence H. Meyer three times. Though he said he has not spoken with Mr. Greenspan about the bill, Rep. Baker said that their staffs have been talking.

Fed officials have not weighed in on the bill, but Rep. Baker said the central bank is not eager to take on the job of GSE oversight. He also said Fannie and Freddie executives have balked, concerned that so many details on what the Fed could do are unclear. Responding to that criticism, Rep. Baker said the Fed “knows how to construct this box better than I do.”

Rep. Baker said he is encouraged that Senate Banking Committee Chairman Phil Gramm has taken an interest in the GSE matter. The Texas Republican has said he is “praying over the issue.” To which Rep. Baker said, “I intend to stay close to the prayer meeting and see what comes out of it.”

Office of Federal Housing Enterprise Oversight Director Armando Falcon Jr. spoke before Rep. Baker and insisted his agency is up to the task of supervising Fannie and Freddie. “The current regulatory system works,” Mr. Falcon said. “OFHEO is, and will remain, a strong and effective regulator.”

Mr. Falcon knows he is in a tenuous position and spoke gingerly of Rep. Baker’s bill.

“The real heart of the issues currently surrounding the enterprises are mostly related to their activities and their charters — not their financial health,” he said. “And so I am cautious about proposals that could disrupt current safety-and-soundness regulation in an effort to address a separate set of mission-related issues.”

With both Rep. Baker and Mr. Falcon pulling punches, the fireworks were left to a panel sandwiched between their speeches featuring critics and champions of the government-sponsored enterprises.

On offense were the former Treasury official Rick Carnell and the independent consultant Bert Ely. Defending the GSEs were the former budget director Jim Miller and Timothy Howard, Fannie’s executive vice president and chief financial officer.

Mr. Howard left the blustering to Mr. Miller, who at times sounded a bit like Sen. Gramm with his drawl and references to his mother’s views of the world.

Titling his presentation “Fannie Mae and the Mortgage Market: Setting the Record Straight,” Mr. Howard unleashed a barrage of numbers designed to convince the audience that the mortgage market is so competitive that the GSEs have no power to manipulate prices, let alone intimidate rivals.

“Fannie Mae is a model of private capital that produces public benefits,” he said.

Mr. Howard said the 1996 CBO report found a “theoretical subsidy rather than a real one. It cannot be tracked or traced and cannot be tied to the workings of our business.”

In fact, Mr. Howard said, if any participants in the mortgage market benefit from the government’s backing, it is banks and thrifts. They used their federally insured deposits to “command an 84% share of the home equity and second mortgage market and a 68% share of the adjustable-rate mortgage market” in 2000, he said. The GSEs, he said, have a 2% and 5% share of those markets respectively.

But Mr. Carnell, now a professor at Fordham Law School, said tax breaks, a Treasury line of credit, and an exemption from SEC registrations made Fannie’s and Freddie’s government benefits far larger than those enjoyed by banks and thrifts.

What’s more, Fannie and Freddie have their own type of funding advantage, he said, borrowing $1 trillion at rates just above government debt because the market believes the GSEs’ securities are backed by Uncle Sam.

“We the people have lent our national credit card to Fannie and Freddie,” Mr. Carnell said.

Because the conference was dedicated to debate over the federal safety net, deposit insurance reform was also a major topic.

“Too big to fail” came up again and again, with many variations of the phrase tossed out.

A Canadian regulator suggested that if large banks and the GSEs were “too good to fail,” there would be no debate over how to fix deposit insurance or oversee Fannie, Freddie, or the 12 Home Loan banks. Early-warning systems ought to enable regulators to intervene before a bank fails, he said.

Another expert, who after two glasses of wine at the reception Thursday asked that his name be withheld, agreed that “if regulation were better, we wouldn’t be talking about deposit insurance reform or GSE oversight.

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