The properties of ideal entities aren't much use in a universe where nothing approximating such entities actually exists.
Note that Fannie and Freddie actually lied about the mortgages pools that they constructed (said mortgages contained more subprime than they admitted). This not only defrauded the folks who bought those pools, it also made the entire mortgage market look safer than it actually was.
Note that it was regulators who pushed subprime mortgages and insurance for such securities (so they could justify "encouraging" banks to hold them as regulated assets). Said regulators also gave ratings monopoly AND told banks that they had to hold Fannie and Freddie stock, which put many of them into technical default when Fannie and Freddie went down.
At best, regulation is systemic risk. Often, it's corruption backed by a threat of violence.
The properties of ideal entities aren't much use in a universe where nothing approximating such entities actually exists.
Note that Fannie and Freddie actually lied about the mortgages pools that they constructed (said mortgages contained more subprime than they admitted). This not only defrauded the folks who bought those pools, it also made the entire mortgage market look safer than it actually was.
Note that it was regulators who pushed subprime mortgages and insurance for such securities (so they could justify "encouraging" banks to hold them as regulated assets). Said regulators also gave ratings monopoly AND told banks that they had to hold Fannie and Freddie stock, which put many of them into technical default when Fannie and Freddie went down.
At best, regulation is systemic risk. Often, it's corruption backed by a threat of violence.