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Dividends Lower Effective Borrowing Costs
In an environment with higher interest rates than have been observed in almost a generation, FHLBank Boston dividends are an important consideration when evaluating funding options and prices. Dividends reduce effective borrowing costs and unlike other alternative funding providers, there are no other basis point fees that would increase the net borrowing cost. Ignoring these subtleties could be costly to your institution.
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Identifying and Managing Tangible Capital
Declining tangible equity could impact a depository’s credit status category at FHLBank Boston through legacy regulation. As of December 9, 2022, FHLBank Boston policies dependent on specific tangible equity ratios were changed to no longer automatically affect a member’s credit status category. Borrowing restrictions for any institution with negative tangible equity remain.
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Credit Union Strategies for Managing the NEV Test
Higher interest rates and lower capital ratios have created new interest-rate risk management challenges for credit unions. FHLBank Boston advances can offer solutions to mitigate those risks.
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Funding Strategies for Volatile Markets
Shifting expectations on the Federal Reserve’s path have changed the level and shape of the curve, creating liquidity needs but also opportunities for members.
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Short-Term Rates with Long-Term Liquidity
Several advance solutions exist to calibrate interest-rate risk and liquidity needs to different parts of the yield curve.
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Introducing the SOFR Flipper and Callable SOFR-Indexed Floater Advances
FHLBank Boston is pleased to add two new advance products to help members meet their funding needs.
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Investment Leverage Opportunities
Rising interest rates and widening spreads have presented an opportunity to counteract pressure on earnings caused by extraordinary factors from 2021 subsiding.

