The U.S. Government Accountability Office (GAO) recently published a report on the actions of the FHLBanks during the spring 2023 bank failures that disrupted the financial markets. The Council of Federal Home Loan Banks, the public voice of the Federal Home Loan Bank System (FHLBank System), applauds the findings of the report.

The GAO report provides a fact-based account of the role of the FHLBanks in the period up to and during the failures of Silicon Valley Bank (“SVB”), Signature Bank (“Signature”), and First Republic Bank (“First Republic”) between March and May of 2023. The report further notes that the FHLBanks of San Francisco and New York followed established procedures and worked closely with the Federal Reserve, the FDIC, the Federal Housing Finance Agency (which regulates the FHLBank System), and the state banking regulators of SVB, Signature, and First Republic as the three banks’ conditions deteriorated.

“We appreciate the findings in the GAO’s report, and we believe they validate what we have been saying for a year: that the FHLBanks acted as a critical shock absorber for the financial system during a period of unprecedented turbulence in the spring of 2023,” said Ryan Donovan, president and CEO of the Council of Federal Home Loan Banks. “The two most important takeaways from this report are that the FHLBanks provided crucial liquidity to their members in direct accordance with the structure and role laid out for them by Congress and that the FHLBanks worked tirelessly in a coordinated fashion with primary financial regulators to ensure the safety and soundness of the U.S. banking system. It is also worth noting that the GAO report affirms that advances provided to the failed banks had a very limited, if any, direct impact on the Deposit Insurance Fund.”

Read the full press release by the Council of Federal Home Loan Banks.