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FHLBs Announce ABA-Supported Capital Initiative

Posted on 3/2/2011

The Federal Home Loan Banks yesterday announced an initiative to strengthen the capital and security of the FHLB system. The initiative will direct 20 percent of the banks' earnings - a portion equal to the amount the banks have historically paid to satisfy their Refcorp bond obligations, which end this year - to enhance the capital position of each bank.

John von Seggern, president and CEO of the Council of Federal Home Loan Banks, said the plan creates an additional buffer to absorb unexpected losses on the balance sheets of FHLBanks; assures a steady flow of funds to support housing and community development; provides even greater security and certainty to FHLBank debt investors; strengthens the long-term viability of Affordable Housing Program grants to nonprofits; and reduces the potential that FHLBanks will ever require taxpayer assistance.

To read von Seggem's statement visit: http://www.fhlbanks.com/assets/pdfs/section-newsevents/press_releases/SCI_vonSeggern_statement_final.pdf

To view a Q&A on the System Capital Initiative Visit: http://www.fhlbanks.com/assets/pdfs/section-newsevents/press_releases/SCIJointCapitalEnhancementAgreementQ&AFinal3111.pdf


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