WASHINGTON — In an era of low interest rates, weak loan demand and unprecedented efforts by the Federal Reserve Board to pump liquidity into the economy, the demand for Federal Home Loan Bank advances has plummeted to a 10-year low, raising questions about the system's future as the government weighs a redesign of the housing finance sector.
Total outstanding advances fell to $402 billion in the third quarter, their lowest point since 1999, and far below their $809 billion total at the end of 2007. At the same time, the number of member banks holding such advances has also cratered, to 4,671, the fewest in more than a decade.
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