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- Title
AN EXAMINATION OF THE FINANCING OF FEDERAL HOME LOAN BANK ADVANCES: A COMMENT.
- Authors
Kaufman, Herbert M.
- Abstract
The article presents a comment on the article "The Federal Home Loan Bank and Savings and Loan Associations: An Examination of the Financing of Federal Home Loan Bank Advances," by Jene K. Kwon and Richard M. Thorton, published in the February 1972 issue of the journal Review of Economics and Statistics. According to the author, the researchers argue that their empirical research supports the distinctive implication of the model, that Federal Home Loan Bank (FHLB) bonds are a substitute for savings and loan (S and L) deposits. It is the contention of this note that no such "distinctive" implication can be drawn. The important unanswered questions that need to be addressed are, how important an effect does the competition of FHLB bonds have on S and L deposit flows, and the related question, given that FHLB bonds do compete in the market with deposits at S and L's, what is the actual net impact on S and L's of an increase in FHLB bond flotations for the purpose of making advances to S and L's. If these questions could be answered, a thorough assessment of the FHLB advances program could be made.
- Subjects
RESEARCH; KWON, Jene; KWON, Jene K.; THORNTON, Richard; THORTON, Richard M.; FINANCE; REVIEW of Economics &; Statistics (Periodical); EMPIRICAL research; FEDERAL home loan banks; SAVINGS &; loan associations
- Publication
Review of Economics & Statistics, 1973, Vol 55, Issue 2, p257
- ISSN
0034-6535
- Publication type
Article
- DOI
10.2307/1927001