FROM THE OFFICE OF PUBLIC AFFAIRS

August 21, 2002

Mr. Michael A. Jessee

Federal Home Bank of Boston

President and CEO

111 Huntington Avenue, 24th Floor

Boston, MA 02199

Dear Mr. Jessee:

On July 16, 2002, I testified before the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises (GSEs) to offer the Administration’s views on GSEs, and in particular on the subject of their financial disclosures. As I stated in my testimony, the Administration believes that GSEs, through their financial disclosures, should be "role models for our system of investor protection, not exceptions to it." Given the size and importance of the GSEs’ operations in our capital markets and banking system, continued operations outside of the Securities and Exchange Commission (SEC)-administered corporate disclosure regime is inconsistent with our goal of a sound and resilient financial system.

I know that the Administration’s goal is shared by the Federal Housing Finance Board and that Chairman Korsmo has begun working with you to enhance financial disclosures by the Federal Home Loan Bank (FHLBank) System.

The Administration strongly supports the recent agreement between Fannie Mae and Freddie Mac, the SEC and the Office of Federal Housing Enterprise Oversight and believes that the disclosure requirements of the Securities Exchange Act of 1934 (1934 Act), as interpreted and applied by the SEC, should apply to all GSEs. The mechanism of voluntary registration of equity securities under section 12(g) of the 1934 Act is available to you and other GSEs. As you and your regulator discuss that and other disclosure initiatives, we have asked Chairman Korsmo to include compliance with other sections of the 1934 Act in the rulemaking agenda.

Chairman Korsmo and I will continue to confer regularly on this matter and I encourage you to cooperate fully in making the FHLBank System a role model for financial disclosure and investor protection.

Sincerely,

Peter R. Fisher

Under Secretary for Domestic Finance

cc: Chairman Korsmo, Federal Housing Finance Board