Bank Crisis Shows Signs of Easing as FHLB Debt Issuance Shrinks in Late March
- Issuance to banks slides to $37 billion from over $300 billion
- Drop is positive sign following SVB, Signature Bank failures
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The Federal Home Loan Bank system issued $37 billion in debt in the last week of March, a sharp drop-off from the $304 billion two weeks earlier, according to a person familiar with the matter. That plunge from an all-time peak earlier in the month is an early sign that the banking crisis has started to subside.
The FHLBs are a Depression-era backstop created to boost mortgage lending. The system is now known as the “lender of next-to-last resort” — a play on the nickname for the Federal Reserve’s discount window that underscores the FHLBs’ role as a lender that banks use to bolster their balance sheets.