| | Tue, 23 Sep 2008 11:30:40 EST
When the two government sponsored enterprises (GSEs) were originally placed in conservatorship on September 7, federal regulators estimated that only a few dozen banks were holding preferred paper in the institution. However, the ABA survey has found that about 27 percent of banks are preferred stockholders and another 3-1/2 percent own auction-rate securities that are backed by preferred stock. For those banks which are preferred stockholders, the average exposure of their core capital is 11 percent. In its letter on September 22 the ABA requested that the government take six actions to resolve the preferred stock situation:
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