What are the implications of Federal Home Loan Banks seeking $64 Billion?

nothing good

From wiki:

quote:

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The Federal Home Loan Banks (FHLBanks, or FHLBank System) are 11 U.S. government-sponsored banks that provide liquidity to the members of financial institutions to support housing finance and community investment.

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Sounds like these FHLBanks got themselves in a bind with treasuries under the "hold until maturity" accounting designation too. Apparently the hold until maturity designation allows these banks to avoid unrealized gains and losses until maturity but on the other hand it ties up assets, makes them illiquid. So when depositors want their money (withdrawals) they have to seek money from other sources because most of their assets are tied up on hold until maturity assets. Thus the issuance of $64 billion in short term notes.

They timing of the notes must be based on the fact that these "hold until maturity" assets can be redesignated and become liquid.

What is happening is depositors are withdrawing money from banks paying shitty interest rates and buying treasuries paying much higher interest rates.