The banking system that loaned billions to SVB and First Republic

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 2 May 2023

⏱️ 10 minutes

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Summary

Unsung hero of the financial system or enabler of failing banks? Today on the show, how the Federal Home Loan Bank system, originally designed to support homeownership and affordable housing, ended up loaning billions to failing banks like First Republic.

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Transcript

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0:00.0	NPR.
0:12.1	This is the Indicator from Planet Money, I'm Darian Woods.
0:14.9	And I'm Whalen Wong.
0:16.2	On a chilly morning last November, a group of state and local government officials gathered
0:20.7	on an empty lot in Mesquite Nevada.
0:23.4	They were there to break ground on a new affordable housing development.
0:27.2	The functionaries all got lined up with hard hats and shovels already for a photo.
0:32.5	And what are the special guests?
0:33.6	Was a woman named Nia Germa?
0:35.6	I thought that I was really coming in and getting to work.
0:38.3	I didn't realize that she just put a little dirt on your shovel and pose.
0:42.3	They said, Nia, you can stop digging.
0:45.4	Stop digging, Nia.
0:46.4	You can't dig your way out of a hole.
0:47.7	Yeah, she's like a one woman construction crew.
0:50.5	Nia's actual title is affordable housing advocate in the Nevada Housing Division.
0:55.8	In her job in state government, she's seen how hard it can be to find the money for
0:59.8	these kinds of projects.
1:01.4	But one important source of funding is an institution called the Federal Home Loan Bank.
1:06.7	They've done something really remarkable, which is targeting some funds for affordable
1:11.6	housing, specifically for Nevada.
1:14.7	The Federal Home Loan Bank System funds affordable housing projects.
	...

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