By Neil Milner, President and CEO, Conference of State Bank Supervisors

WASHINGTON, D.C. -- "I am pleased the Treasury Department had the authority and ability to address the uncertainty surrounding Fannie Mae and Freddie Mac.  I am hopeful the actions over the weekend will contribute to market stability and ensure the availability of mortgage finance, which is critical to American families, banks and our economy.

"However, this action is a stark reminder of the risk these and other large, interconnected institutions pose to the U.S. financial system.  As we have seen this year, when these firms experience problems, they generate significant market stress and require direct federal intervention.  This has a direct impact on the economic health and confidence of all Americans.

"As policy makers contemplate the future of our regulatory system, it will be critical for us to assess the country’s tolerance for this risk, the industry's ability to manage it and the government's ability to regulate it.  CSBS firmly believes the diversity of our current financial system has and will continue to assist in mitigating the risk of these large, interconnected firms by providing local market stability.  It is in the nation's interest to ensure that any proposed regulatory structures have diversity as a fundamental goal."