Jerry Blanchard recently spoke to the national sales meeting of the Federal Home Loan Banks on the topic of How the Regulators View the FHLB’s.

The FHLB system has been a major source of liquidity to its over 8,000 members during the financial crisis and faces many challenges as the system deals with:

  • shrinking demand for loan advances;
  • losses incurred in mortgage backed securities that have led to a number of the FHLB’s having to enter into Consent Orders with  their primary regulator; and
  • greater Congressional scrutiny of all government sponsored entities.

Banking regulators deal with the consequences of FHLB policies and actions when financial institutions are taken into receivership. In some instances, the availability of FHLB advances may have led to some banks to incurring more risk than they would  have otherwise  incurred.

Jerry’s presentation addressed how the banking regulators view the role of the FHLB ‘s and how those views might affect bank examinations in the future.  If you would like more information, a copy of Jerry’s FHLB presentation is available online, or reach out to Jerry Blanchard to discuss further.