![]() Aaron Klein is a senior fellow in economic studies at the Brookings Institution.ĪARON KLEIN: The home loan bank system has one of the great business models of society. But in 1989, the system was opened up to commercial banks and credit unions. WONG: At first, membership in the system was limited to financial institutions that provided mortgages. WOODS: And the Federal Home Loan Bank System has been playing this role since 1932. That money goes towards helping banks that might be struggling with declining deposits or liquidity issues. ![]() WAILIN WONG, BYLINE: They provide funding to other banks in the form of loans. Darian Woods and Wailin Wong from our daily economics podcast, The Indicator, explain how this 90-year-old piece of financial architecture works and why it might need an update.ĭARIAN WOODS, BYLINE: If you're not working in the banking or housing industries, you might not ever have heard of the Federal Home Loan Bank System. All of them, including First Republic, borrowed money from Federal Home Loan Banks before their demise. We've seen some high-profile bank failures this year. ![]()
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