Fed's Bernanke tells GSEs discount window open-source

By Patrick Rucker

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke told Freddie Mac chief Richard Syron that his company and Fannie Mae could take advantage of the emergency discount window, according to a source familiar with the conversation.

The source said that Bernanke and Syron spoke by phone Thursday afternoon and the central bank chief said in that call he intended the discount window to be opened if necessary to the two largest U.S. mortgage finance companies.

The Fed declined to comment on whether it was considering opening its discount window to the government-sponsored enterprises (GSEs). A senior senator said at a press conference on Thursday afternoon that such action was among a range of possibilities under discussion to help the struggling mortgage lenders weather a crisis of confidence.

"I know that both the Fed and the Treasury are looking at various options ... including things like the discount window," Senate Banking Committee Chairman Chris Dodd told a news conference on Capitol Hill on Friday.

"I don't want to draw any conclusions about it yet, but they are certainly examining what other means might be necessary in order to shore up the situation," the Connecticut Democrat said.

Freddie Mac spokesman Douglas Duvall declined comment when asked about a phone call between Bernanke and Syron. A Fannie Mae spokesman was not immediately available for comment.

Fannie and Freddie shares have been pummeled in recent days amid reports that the Bush administration was considering contingency plans for taking over one or both of the companies and place them in a conservatorship if their problems deepened.

Fannie Mae shares slid 22.4 percent to end at $10.25, off a session low at $6.87, while Freddie Mac ended down 3.1 percent at $7.75, off a session low at $3.89. The listings topped the list of the New York Stock Exchange's biggest percentage losers.