Liquidity Crunch? The Federal Home Loan Bank System – Reality versus Myth

By: Jeffrey P. Marsico
Sharon J. Lorman
Richard B. Trauger, Jr.

Guest: Maureen Kalena, Vice President/Relationship Manager, Federal Home Loan Bank of New York

Podcast Show Notes:

Our This Month In Banking (TMIB) podcast features discussion with colleagues and other industry thought leaders on interesting banking news that happened this month. TMIB will be available on the last Wednesday of every month here, and on Apple and Droid podcast apps for your listening enjoyment. Join us on your commute or at your desk.

Topic: Liquidity Crunch? The Federal Home Loan Bank System – Reality versus Myth
Start time: 1:45
Do you think in times of stress, your Federal Home Loan Bank (FHLB) borrowing capacity would dry up?  In the Summer 2017 FDIC Supervisory Insights article, Community Bank Liquidity Risk: Trends and Observations from Recent Examinations, it states that the FDIC recently has observed “trends in smaller banks’ (those with less than $10 billion in assets) balance sheets, which suggest that as the current business cycle progresses, liquidity risk is generally increasing for these institutions as a group.”1.  While some industry pundits warn that FHLB borrowing capacity would diminish in times of stress, TMIB is pleased to hear from Maureen Kalena, Vice President at Federal Home Loan Bank of New York, to dispel the myths and convey the reality of what happens to a bank’s FHLB line of credit when their liquidity position deteriorates.  We thank Maureen who is taking time out of her schedule at the 2018 FMS Forum in Orlando to speak with us!

About Maureen Kalena
Maureen has been at the FHLB of New York since February 1990 and is currently Vice President/Relationship Manager.  Maureen is also past president of the FMS NY/NJ Chapter (2013-2014).  In addition, Maureen is a Trustee of HomeSharing, Inc., a non-profit located in Bridgewater, New Jersey serving Central New Jersey and Essex County.  HomeSharing helps prevent homelessness by providing an affordable housing alternative.
About the Federal Home Loan Bank of New York
The Federal Home Loan Bank of New York (FHLBNY) helps community lenders in New Jersey, New York, Puerto Rico and the U.S. Virgin Islands advance housing and community growth. The FHLBNY is part of the congressionally chartered, nationwide Federal Home Loan Bank System, which was created in 1932 to provide a flexible credit liquidity source for member community lenders engaged in home mortgage and neighborhood lending. The FHLBNY increases the availability of mortgages and home finance to families of all income levels by offering high-value correspondent and cash management services to assist our members in more effectively serving their neighborhoods and meeting their Community Reinvestment Act responsibilities.”2
1 https://www.fdic.gov/regulations/examinations/supervisory/insights/sisum17/si-summer-2017-article01.pdf

Watch for episode 31 of This Month in Banking to be released on Wednesday, July 25, 2018 and a new episode on the last Wednesday of every month.

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