U.S. Home Loan Banks Overexposed in Europe, Audit Finds

From bloomberg.com

The U.S. Federal Home Loan Banks’ unsecured lending to foreign institutions skyrocketed last year as the European sovereign debt crisis intensified, raising concerns about their risk management, an auditor’s report said today. The Federal Housing Finance Agency, which oversees the 12 regional Home Loan Banks, should tighten limits on such lending and improve monitoring of whether that lending exceeds the limits, the FHFA Office of Inspector General said in the report. “FHFA’s current regulation continues to permit FHLBanks to build large unsecured credit portfolios that may produce unreasonable ... (full story)