federal home loan banks

Another government-sponsored credit agency that taps the money and capital markets for funds from time is the Federal home Loan Bank System, which was established in 1932 to help the sagging home-building industry, and became privately owned, though still government-sponsored, after world war II. it is composed of 12 home loan Banks, which have about 4600 savings and loan associations as members that can secure credit from the parent banks.(At the end of 1976, $16,8 billion had been loaned to the member savings and Loan Associations,with tree fourths of the loans having a maturity over one year.) It is Thus organized Similarly to the Federal Reserve System, which has commercial bank members who can borrow from their regional banks. Unlike the federal reserve System, however, the federal home loan bank system issues notes and Bonds in the financial markets, which may be purchased by Commercial Banks for their Investment portfolio. to attract buying interest, the Federal home loan bank board (FHLB)offering of notes or bonds are at a higher Yield than Comparable Treasury issues, Since they are not fully guaranteed by the Treasury.