It has been predominantly used by life insurers, because they need to boost their investment returns with cheap funding to meet long-term liabilities.
They provide the cheap funding to banks and insurers in exchange for collateral to ensure they get their money back.
Insurers are entitled to tap FHLB funding.
Insurers’ borrowing from FHLBs picked up in 2008 financial crisis, as those that spread themselves thin with aggressive investments scrambled for cash.
They did not explain why insurers need FHLB funding to invest in mortgages.
Persons:
Sarah Silbiger, Ryan Donovan, CMBS, Lawrence White, White, Graphics JUICING, Cynthia Beaulieu, Cornelius Hurley, Hurley, FHLBs, ’, Michael Ericson, Jack Dolan, Koh Qui, Greg Roumeliotis, Anna Driver
Organizations:
REUTERS, Loan, Federal Housing Finance Agency, of Federal Home Loan, FHLBs, FHLB, National Association of Insurance, New York University, MetLife Inc, Equitable Holdings Inc, Corebridge, Brighthouse Financial, MetLife, TIAA, Equitable, Graphics, Wellington Management, Boston University School of Law, Coalition, Silicon Valley Bank, First, American, of, Insurance Coalition, Reuters, Thomson
Locations:
Washington , U.S, U.S, Boston, Silicon, First Republic, Chicago, New York