The Federal Home Loan Banking system, which pushed hundreds of billions of dollars into small banks during the banking collapse earlier this year, is pulling back on these loans:

“…during the week beginning March 13, 2023, the FHLBanks funded $675.6 billion in advances, the largest one-week advance volume in FHLBank System history.”

Analyst Comment: Regional banking has remained in severe distress and has only survived through massive liquidity injections. If those are pared back, it’s going to get ugly in banking again.