As noted in an article on CNNMoney, He said, "Government likely has a role to play in supporting mortgage securitization, at least during periods of high financial stress,"
But, the financial stress of the mortgage industry could last as long as ten years and even at that point, who is going to buy up 5 trillion dollars in risky mortgage loans?
Bernanke went on to say that privatizing the roles of Fannie and Freddie at some point in the future is not practical because it puts too much risk on the economy to whether the storms of market instability. In other words, the government will indefinitely from this time forward remain the lender and owner of a majority of mortgages in the US.
Bernanke did not endorse any specific alternative for Fannie and Freddie, but instead he gave a rundown of numerous proposals that have already been raised by Fed and Treasury officials as well as other experts.
The Government is Not Planning to Return to Capitalism
Many of the supporters of the $700 government bailout of the financial industry were under the impression that the government needed to temporarily step in to help reduce the impact of the pending recession and that after they have help the economy get on its feet, they would reduce their role and return control to the forces of capitalism. Based on this speech today, that is not the case. The government role in planning the economy and ultimately the production of our nation is now permanent. The financial leaders that we gave our economic freedoms to are not planning to give them back – just as I predicted.