Why Banks Invest In Fannie And Freddie Preferred Stock

thedealsleuth.wordpress.com — From Sovereign (SOV) to JP Morgan (JPM) banks make headlines with writedowns on their holdings of Fannie’s (FNM) and Freddie’s (FRE) preferred stock, but the obvious question of how stock ever got onto banks’ balance sheets is only asked by Felix Salmon - and even he doesn’t know the answer. In general, banks are barred from investing in equities.