Today, after many adjustments by Congress over the years, it is a cooperative of 11 regional wholesale banks, each comprised of member financial institutions. What role did Congress’s insatiable spending and the Federal Reserve printing trillions of dollars over the last 15 years play, for instance? Did the Fed’s 15-year suppression of interest rates at historically low levels only to jerk them up as inflation inevitably threatened the economy set financial intermediaries up to fail? And just how did those failed banks operate themselves into such dire condition under the watchful eyes of their federal and state regulators?Ĭongress devised the FHLBank System in 1932 to help savings and loan associations finance home mortgages and rejuvenate an economy battered by the Great Depression. It is entirely fair to evaluate the role of the FHLBanks in these collapses, but the same is true of other, perhaps more inconvenient, questions and culprits.
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