The vast majority of the largest U.S. banking organizations already issue subordinated debt, and this debt does provide some market discipline and transparency.

The subordinated debt issued by Fannie Mae and Freddie Macis notcredibly unprotected and of sufficient size.

This statement supports the move towards greater reliance on internal ratings, but market discipline should be reinforced by a mandatory subordinated debt requirement.

The Committee is concerned about increasing interference with independent accounting standard setting and recommends separating accounting standard setting and financial reporting from measuring regulatory capital for financial institutions.

We should aim in the long term for a housing finance sector which is principally a robust private market, and one in which you can be either a private company, or you can be a government agency, but you can't be both.

The Committee believes that a properly structured CoCo requirement could have important incentive benefits that would nicely complement the new higher minimum capital requirements.

The Treasury should invest about $10 billion of capital in both Freddie Mac and Fannie Mae.

Alex Pollock gives the House Financial Services Committee 12 different solutions and ideas for moving forward and dealing with Fannie Mae and Freddie Mac.