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Access to FHLBank advances and the performance of thrift institutions

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  • Lisa K. Ashley
  • Elijah Brewer
  • Nancy E. Vincent

Abstract

This article examines thrift financial data from 1985 to 1991 and finds that financially distressed thrifts, especially those benefiting from regulatory forbearance policies, tended to borrow more from Federal Home Loan Banks. The authors also find that the stock returns of distressed thrifts reflected the subsidized rates at which they were able to borrow from the Federal Savings and Loan Corporation.

Suggested Citation

  • Lisa K. Ashley & Elijah Brewer & Nancy E. Vincent, 1998. "Access to FHLBank advances and the performance of thrift institutions," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 22(Q II), pages 33-52.
    • Handle: RePEc:fip:fedhep:y:1998:i:qii:p:33-52:n:v.22no.2
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    References listed on IDEAS

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    1. Stone, Bernell K., 1974. "Systematic Interest-Rate Risk in a Two-Index Model of Returns," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 9(5), pages 709-721, November.
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    1. Robert N. Collender & Julie A. Frizell, 2002. "Small Commercial Banks and the Federal Home Loan Bank System," International Regional Science Review, , vol. 25(3), pages 279-303, July.
    2. Travis Davidson & W. Simpson, 2016. "Federal Home Loan Bank advances and bank risk," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(1), pages 137-156, January.
    3. James Cash Acrey & Wayne Y. Lee & Timothy J. Yeager, 2019. "Can Federal Home Loan Banks effectively self-regulate lending to influential banks?," Journal of Banking Regulation, Palgrave Macmillan, vol. 20(2), pages 197-210, June.
    4. Toni Ahnert & Kartik Anand & Prasanna Gai & James Chapman & Philip StrahanEditor, 2019. "Asset Encumbrance, Bank Funding, and Fragility," The Review of Financial Studies, Society for Financial Studies, vol. 32(6), pages 2422-2455.
    5. Hesna Genay, 1998. "Assessing the condition of Japanese banks: how informative are accounting earnings?," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 22(Q IV), pages 12-34.

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