GSE's posed unacceptable risk to U.S. economy: Bush

WASHINGTON (Reuters) - U.S. President George W. Bush said on Sunday that the troubles at mortgage finance companies Fannie Mae and Freddie Mac posed an "unacceptable risk" to the economy.

"Today, the Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, determined that these housing mortgage companies cannot continue to operate safely and soundly, and fulfill their public mission -- posing an unacceptable risk to the broader financial system and our economy," Bush said in a statement.

The two government-sponsored enterprises, which are publicly traded but also serve a government mission to support housing, were put in conservatorship on Sunday, allowing their stock to keep trading but putting common shareholders last in any claims.

"Putting these companies on sound financial footing, and reforming their business practices, is critical to the health of our financial system and to making further progress with the housing correction that today is weighing heavily on our economy," the president said.

(Reporting by Nancy Waitz; Editing by James Dalgleish)