Liquidity

The Federal Housing Finance Agency says it wants to more closely tether Federal Home Loan bank advances to housing and community development. Doing so will first involve clearly defining the banks' mission through regulation.

The Federal Housing Finance Agency said in a long-awaited report that it will set up new guardrails for the Federal Home Loan Banks to ensure that the institutions are serving a housing-centric mission.

Data from recent bank failures suggests that prevailing assumptions about which deposits are the most volatile could be dangerously flawed.

Although the Columbus, Ohio-based regional emerged from the recent crisis relatively unscathed, management was still taking steps to shore up its balance sheet, including forgoing stock buybacks to strengthen a key capital metric.

The use of the Federal Reserve's emergency lending facilities was largely unchanged this week, indicating to some that the recent liquidity crisis isn't getting any worse.

It would be unwise to restrict the use of Home Loan bank advances to housing-related lending.

The liquidity facility launched by the central bank over the weekend saw limited uptake compared to other emergency funding options.

Small and midsize banks flooded the Federal Home Loan Bank System with demands for liquidity to avert potential bank runs and stave off taking unrealized losses on investment portfolios just as the Federal Reserve opened a liquidity facility for just that reason.

The Treasury Department issued a "systemic risk exception" allowing it to cover uninsured deposits at SVB and Signature Bank, which New York State closed on Sunday.

Both Silvergate and Signature banks, two of the most active crypto counterparties in the banking sector, received advances from the quasi-governmental lenders to offset falling deposits.