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The Little-Known Entity That’s Lent Over $1 Trillion To U.S. Banks (10x The Fed!) | Professor Kathryn Judge on The Federal Home Loan Bank (FHLB) System
Since the fall of Silicon Valley Bank (SVB) in March 2023, many investors have been closely monitoring the Federal Reserve’s recent lending to U.S. banks, which amounts to roughly $100 Billion as of late June.
What has received far less attention is the Federal Home Loan Bank (FHLB) system, which has extended over $1 Trillion of liquidity (10x the Fed!) to banks throughout the U.S.
Kathryn Judge, Harvey J. Goldschmid Professor of Law at Columbia Law School, joins Forward Guidance to explain the history and purpose of the FHLBanks, calling them the “lender of second-to-last resort.” Judge argues that the FHLB system has grown beyond its original mission and that reform is desperately needed. Judge also opines on the SEC’s move to regulate crypto, as well as SOFR’s replacement of LIBOR. Filmed on June 29th, 2023.
____
Follow Kathryn Judge on Twitter https://twitter.com/ProfKateJudge
Follow Jack Farley on Twitter https://twitter.com/JackFarley96
Follow Forward Guidance on Twitter https://twitter.com/ForwardGuidance
Follow Blockworks on Twitter https://twitter.com/Blockworks_
____
Kathryn Judge’s book, “Direct: The Rise of the Middleman Economy and the Power of Going to the Source”: https://kathrynjudge.com/books/direct
“The Problem Lender of Second-to-Last Resort”: https://prospect.org/economy/2023-03-29-problem-lender-federal-home-loan-banks/
____
Use code GUIDANCE20 to get 20% off Permissionless 2023 in Austin:
https://blockworks.co/event/permissionless-2023
Research, news, data, governance and models – now, all in one place. As a listener of Forward Guidance, you can use code GUIDANCE10 for a 10% discount when signing up to Blockworks Research https://www.blockworksresearch.com/
____
Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:
https://rb.gy/5weeyw
Market commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos
____
Timestamps:
(00:00) U.S. Banking System Is "Uneven"
(03:06) What Is The Federal Home Loan Bank (FHLB) System?
(07:24) Deregulation in 1980s and 1990s
(11:22) Commercial Banks vs. Thrifts (And Glass–Steagall)
(17:31) FHLB Lending During Great Financial Crisis (GFC)
(25:14) "FHLB Has Never Lost Money On Advances"
(33:54) FHLB's "Abuses" Must Stop
(34:28) Permissionless
(41:24) What Will New Bank Regulation Look Like?
(50:38) Risk-Weighting In Bank Capital Regulations
(53:42) Blockworks Research
(54:42) Held-To-Maturity Accounting
(58:37) The Rise Of Middlemen in Finance And Business
(01:06:00) SEC's War With Crypto
(01:08:04) The End Of LIBOR Eurodollar Contracts
____
Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
View all episodes
By Blockworks
4.6
238238 ratings
Since the fall of Silicon Valley Bank (SVB) in March 2023, many investors have been closely monitoring the Federal Reserve’s recent lending to U.S. banks, which amounts to roughly $100 Billion as of late June.
What has received far less attention is the Federal Home Loan Bank (FHLB) system, which has extended over $1 Trillion of liquidity (10x the Fed!) to banks throughout the U.S.
Kathryn Judge, Harvey J. Goldschmid Professor of Law at Columbia Law School, joins Forward Guidance to explain the history and purpose of the FHLBanks, calling them the “lender of second-to-last resort.” Judge argues that the FHLB system has grown beyond its original mission and that reform is desperately needed. Judge also opines on the SEC’s move to regulate crypto, as well as SOFR’s replacement of LIBOR. Filmed on June 29th, 2023.
____
Follow Kathryn Judge on Twitter https://twitter.com/ProfKateJudge
Follow Jack Farley on Twitter https://twitter.com/JackFarley96
Follow Forward Guidance on Twitter https://twitter.com/ForwardGuidance
Follow Blockworks on Twitter https://twitter.com/Blockworks_
____
Kathryn Judge’s book, “Direct: The Rise of the Middleman Economy and the Power of Going to the Source”: https://kathrynjudge.com/books/direct
“The Problem Lender of Second-to-Last Resort”: https://prospect.org/economy/2023-03-29-problem-lender-federal-home-loan-banks/
____
Use code GUIDANCE20 to get 20% off Permissionless 2023 in Austin:
https://blockworks.co/event/permissionless-2023
Research, news, data, governance and models – now, all in one place. As a listener of Forward Guidance, you can use code GUIDANCE10 for a 10% discount when signing up to Blockworks Research https://www.blockworksresearch.com/
____
Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter:
https://rb.gy/5weeyw
Market commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos
____
Timestamps:
(00:00) U.S. Banking System Is "Uneven"
(03:06) What Is The Federal Home Loan Bank (FHLB) System?
(07:24) Deregulation in 1980s and 1990s
(11:22) Commercial Banks vs. Thrifts (And Glass–Steagall)
(17:31) FHLB Lending During Great Financial Crisis (GFC)
(25:14) "FHLB Has Never Lost Money On Advances"
(33:54) FHLB's "Abuses" Must Stop
(34:28) Permissionless
(41:24) What Will New Bank Regulation Look Like?
(50:38) Risk-Weighting In Bank Capital Regulations
(53:42) Blockworks Research
(54:42) Held-To-Maturity Accounting
(58:37) The Rise Of Middlemen in Finance And Business
(01:06:00) SEC's War With Crypto
(01:08:04) The End Of LIBOR Eurodollar Contracts
____
Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
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