FHLBanks Kept Advancing Cash to SVB and Signature Until They Failed
Summary
Silicon Valley Bank increased its outstanding Federal Home Loan Bank advances 50% in the first week of March 2023, days before it failed on March 10. Signature Bank increased its advances 37% before failing March 12. Both FHLBanks kept assessing risk and extending credit up to the moment each bank collapsed, according to a GAO testimony delivered July 21, 2026 to the House Financial Services Committee. The same testimony reports that the fix for coordinating FHLBanks with the Federal Reserve during the next such episode was, as of December 2025, still in its early stages.
The lending didn't stop as failure neared
FHLBanks generally lend to a member if the requested amount falls within that member's available borrowing capacity, set by its pledged collateral or credit limit; they may limit or deny advances based on supervisory information from the member's primary regulator. In GAO's account⧉, that collateral-based lending logic kept working right through the two banks' final days -- the FHLBanks and federal banking regulators increased how often they communicated in March 2023, but Silicon Valley Bank's and Signature Bank's fast decline outran what that added communication could accomplish. That same month, total FHLBank advances outstanding to all members reached about $1 trillion -- more than during any prior financial-stress episode compared it to.
View data as table
| Silicon Valley Bank | 50% | Increase in outstanding advances in the first week of March 2023, before failing March 10, 2023. |
|---|---|---|
| Signature Bank | 37% | Increase in outstanding advances during March 2023, before failing March 12, 2023. |
The fix that still isn't built
After March 2023, the FHLBanks and the Federal Reserve System launched two efforts⧉ meant to close the coordination gap the failures exposed: increasing engagement between FHLBanks and their regional Federal Reserve Banks, and standing up a working group to improve interoperability between the two systems, whose memberships overlap. As of 's December 2025 report -- the most recent checked before this testimony -- both efforts were still in their early stages, more than two and a half years after the failures that prompted them.
The same December 2025 report put a number on who actually uses FHLBank advances. As of June 2025, 93% of banks were FHLBank members, and more than three-quarters had taken out at least one advance between June 2015 and June 2025. But large banks -- those with more than $10 billion in assets -- made up only about 3% of active members while holding, on average, nearly 74% of all outstanding FHLBank borrowing over that decade.
View data as table
| Share of active FHLBank members | 3% | Large banks made up about 3% of active FHLBank members over the period. |
|---|---|---|
| Share of outstanding FHLBank borrowing | 74% | The same large banks held, on average, nearly 74% of all outstanding FHLBank borrowing over the period. |
- Silicon Valley Bank's outstanding FHLBank advances grew 50% in the first week of March 2023, days before it failed on March 10; Signature Bank's grew 37% during March 2023, before it failed March 12 -- both per GAO's July 21, 2026 testimony⧉, summarizing 's March 2024 findings.
- Both banks' FHLBanks kept assessing risk and extending advances up to the point of failure; the collateral-based lending framework and increased regulator communication in March 2023 could not outpace how fast the two banks were declining.
- System-wide FHLBank advances hit about $1 trillion in March 2023, exceeding levels reached in any prior financial-stress period reviewed.
- The post-2023 fix isn't finished. Two coordination efforts the FHLBanks and Federal Reserve launched after the failures -- more engagement between the systems and an interoperability working group -- were still in early stages as of 's December 2025 report, and large banks (3% of members, ~74% of borrowing) remain the System's dominant users.
This piece rests on one primary document: 's July 21, 2026 testimony (-26-109282), which itself summarizes two underlying reports (March 2024, on the spring 2023 failures; December 2025, on FHLBank borrowing trends). Those underlying reports were not independently re-examined here; figures are as the testimony states them. No individual bank employee, examiner, or FHLBank officer is named -- the finding is about system design and interagency coordination, not individual conduct.
This is a distinct angle from BlackLeaf's earlier coverage: home-loan-bank-dollar covered the System's 2024 dividend-vs-housing income split; fdic-special-assessment-dollar and deposit-insurance-dollar covered the 's post-2023 special assessment, examiner staffing, and capital-ratio warning signs. None addressed the FHLBanks' own lending exposure to the two failed banks or the Fed-coordination gap described here.
Sources(1) ▾
- U.S. Government Accountability Office, Federal Home Loan Banks: Role in Providing Liquidity and Actions Related to the Spring 2023 Bank Failures (2026-07-21) — -26-109282, testimony of the Financial Markets and Community Investment director before the House Committee on Financial Services, Subcommittee on Housing and Insurance, released the same day. Summarizes findings from 's April 2023-December 2025 body of work on the Federal Home Loan Bank System, including a March 2024 report on FHLBank actions related to the spring 2023 bank failures and a December 2025 report on FHLBank borrowing trends. Reports the percentage increases in Silicon Valley Bank's and Signature Bank's outstanding FHLBank advances in the days before each bank failed, the system-wide advances total for March 2023, the status of post-2023 FHLBank/Federal Reserve coordination efforts, and December-2025 membership/borrowing-concentration data. gao.gov · original document
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Silicon Valley Bank increased the balance of its outstanding Federal Home Loan Bank⧉ advances by 50% in the first week of March 2023, before it failed on March 10. Signature Bank increased its outstanding advances by 37% during March 2023, before it failed on March 12. Both banks' FHLBanks -- the government-sponsored lenders that supply member banks with low-cost, collateral-backed loans called advances -- kept assessing risk and extending credit to the two banks up until they collapsed, GAO testified⧉ before the House Financial Services Committee's Subcommittee on Housing and Insurance on July 21, 2026.