Federal Home Loan Bank System Faces Questions As New York Bank Struggles With Commercial Loans

New York Community Bank facing losses on commercial real estate loans, highlighting issues with Federal Home Loan Banks (FHLBs)
FHLBs are privately owned but government-sponsored lenders that provide cheap loans to banks
FHLBs have taken on a central bank-like role in recent liquidity crisis, lending over $1 trillion
Cheap FHLB loans allow troubled banks to delay turning to the Fed, postponing red flags
FHLB privileges like cheap funding and implied government backing should be removed to let market determine role