November 20, 2023

FHLBank System at 100 Report Highlights the Need for a Secure Interbank Lending Marketplace

Earlier this month, the Federal Home Loan Bank (FHLBank) System released “FHLBank System at 100: Focusing on the Future” – a report resulting from its first comprehensive internal review in decades. It contains numerous insights on how FHLBanks can practice good governance and support housing and community development while empowering the regional and local banks that rely on them for funding.

It also contains significant guidance on lending best practices in the wake of the banking turmoil and collapses we saw earlier this year. Generally speaking, it appears that it will be more difficult for regional and local banks to access the liquidity that FHLBanks have historically provided. For example, banks that have less than 10% of their loans in home mortgages will no longer be able to rely on their FHLBanks.

In this environment, the regional and local banks that power our nation’s economy must have other options for accessing liquidity. We believe that the AFX Marketplace – our electronic exchange for overnight, unsecured interbank lending and borrowing – is an ideal choice. With hundreds of participants, robust price discovery, a user-friendly interface and a stable, scalable platform, we make it as easy as possible for financial institutions to find the right lenders and achieve their funding goals without solely relying on FHLBanks.

Want to learn more? Contact us.