Earlier this year, a headline caught the eye of the senior officials at China’s foreign exchange regulator who manage the country’s multitrillion-dollar reserves: the Trump administration had overhauled the boards of Fannie Mae and Freddie Mac.
The officials responded swiftly, instructing a team at the State Administration of Foreign Exchange to kick off an evaluation of the potential investment implications of the shake-up.
The review included a deep dive into both government-backed mortgage consolidators, which bundle home loans made by commercial banks into securities that are sold to investors. They were nationalised by the US government during the financial crisis, but Donald Trump is reportedly considering returning them to private ownership.