Brookings, August 8, 2024, How To Fix Federal Home Loan Banks
The world has changed a lot since 1932. Today, banks and thrifts are functionally the same, and both are eligible for support from the Fed and FHLBanks. The range of collateral that banks, thrifts, and other member financial institutions can post to access financing from the Fed and FHLBanks has expanded dramatically.
FHLBanks previously supported the resilience of thrifts, but this job is better accomplished by the Fed, an organization designed for resilience and supervision. FHLBanks are designed to support housing finance and community development. However, since their members only need 10% of their assets in mortgages, many FHLBank loans do not support housing.
