If they'd taken the same risks that Fannie and Freddie took, they'd have had similar results, and the market may well have gone on functioning as it had before. "Similarly, the total credit losses incurred by the GSEs are about one-fourth those incurred about by private label mortgage securitizations, which are packaged and sold by Wall Street." [0]

The private banks took greater risks and wound up with worse performance.

[0] http://ritholtz.com/2013/03/the-big-lie-annotated-an-aei-his...