If Not Community Banks, Then Who?

As noted in a previous post, the pricing of loans made by the FHLBanks appears too low – especially for loans that provide liquidity.  If it was true for community banks, it is even more so for the dominant FHLBank players – large banks and insurance companies.

The role of the big players may make sense for the FHLBanks, but it is not publicized – or even mentioned except as required for SEC filings.   A picture of JPM’s new tower looming over Park Ave in New York is another big part of the FHLB role but that doesn’t fit in THEIR narrative.  Cheap loans to provide liquidity to whom?

Once the narrative is recalibrated, a more reasoned debate can ensue.  There are some positives and some other well-hidden stories, transparency will help the discussion. 

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