The regulator is also exploring new guardrails for lending money to troubled institutions and tougher stress tests.

The practice came under scrutiny after the FHLBs, which have implied backing from the government, lent heavily to Silicon Valley Bank, Signature Bank and First Republic Bank as they careened toward failure.Īmong the major changes, the FHFA, which oversees FHLBs, will propose a rule to force many banks to hold 10% of their assets in mortgage loans to maintain access to the system. The plans would ratchet up federal oversight, and seek to direct banks toward the Federal Reserve’s discount window in times of extreme stress.īanks borrow hundreds of billions of dollars from the government-chartered FHLBs each year to fulfill short-term funding needs. The Federal Housing Finance Agency will try to push FHLBs back to their roots in housing finance, and away from serving as lenders of last resort to troubled banks, according to a report published Tuesday. (Bloomberg) - US officials will seek to limit access to Federal Home Loan Banks after failing lenders turned to the $1.3 trillion system in desperate bids to survive March’s banking crisis.

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