The camel has been described as a horse designed by a committee. The same idea can be applied to the Federal Home Loan Bank System, a cumbersome arrangement of 12 regional banks, each separately managed and with its own board of directors, overseen by a Washington-based agency, the Federal Housing Finance Board.

Although the system may not be as swift as the horse, it certainly has the durability of the camel. Originally designed as a kind of central bank for the nation's thrifts, it has managed to survive the shrinkage of the thrift business and even prosper by accepting commercial banks as members.

There are rumblings that this camel may be in for a redesign. At an elite conference and ski party here, top mortgage and thrift executives were told that consolidation may be in the offing for the Federal Home Loan banks.

But speakers at the conference disagreed about what form the consolidation might take, if it happens at all.

Michael A. Jessee, president and chief executive of the Federal Home Loan Bank of Boston, said consolidation would be driven by market forces.

Increasingly, he said, institutions operate in more than one region, making it possible for them to be members of more than one home loan bank.

Mr. Jessee's comments were affirmed by James F. Montgomery, former chairman of Great Western Financial Corp. and a member of Freddie Mac's board.

Mr. Montgomery said it is necessary to make capital requirements uniform for all the Home Loan banks to facilitate their mergers. He added that institutions operating in multiple regions can shop around for a home loan bank that is willing to make advances on its weakest loans, a process known as "adverse selection."

Bruce Morrison, chairman of the finance board, said he is skeptical about the prospects for broad consolidation, at least in the near future.

Mr. Morrison, who spent eight years in Congress, pointed to the difficulties the banks are having in speaking with one voice on reform legislation proposed on Capitol Hill.

Another speaker, James M. Cirona, offered a model for consolidation of Home Loan banks. He is co-chief executive of Western Farm Credit Bank and AgAmerica Farm Credit Bank. Although the two banks have remained separate entities, each with its own board and balance sheet, their functions and office staffs have been merged, enabling the two to cut their combined work force to 105 from 185. And Mr. Cirona foresees a further staff reduction to 86.

Mr. Jessee said the consolidation of depository institutions, and the consequent pressure to consolidate the Home Loan banks, was one of the major factors affecting the system's future.

He listed these other key factors:

The growth of commercial banks as shareholders and customers.

Technology-driven changes in the delivery, processing, and production channels for financial services.

Product innovation.

Possible statutory changes.

Mr. Morrison went into some detail about why there is pressure in Congress to revamp the Home Loan Bank System.

"We spent the early '90s battling what happened in the '80s," he said. "The system hid from the public and hid from the issues. It has created a situation in which the value of the system is not well understood or well respected."

He added that a key question the system must answer is, "Why is the funding advantage of a government-sponsored enterprise being used to arbitrage products unrelated to its mission?"

He was referring to investments by the system that are not related to housing. In his presentation, Mr. Jessee said that such investments are becoming more important because spreads the banks receive on advances to members have shrunk, putting pressure on profits.

The spreads averaged 16 basis points last year, down from 64 basis points in 1993. One reason for the shrinkage is the mandate by Financial Institutions Reform, Recovery and Enforcement Act that the banks make 20% of their advances on a nonprofit basis. The investments unrelated to their mission have allowed the banks to maintain a stable dividend yield.

Mr. Morrison said he sees the system as having three primary functions: as a central bank for community banks; to make community banks competitive with capital market players in making home loans; and to promote targeted economic development.

The conference here, known simply as Midwinter, is sponsored by Richard T. Pratt, a former chairman of the defunct Federal Home Loan Bank Board who is a finance professor and private entrepreneur. The invitation-only event draws more than 100 top thrift and mortgage executives each year.

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