The Federal Home Loan Banks have grown over the past few years with their total assets surpassing pre-crisis levels, according to a new Federal Reserve report analyzing recent trends and the increased role of the FHLBank system. The Fed noted that the growth coincided with two government policies: the imposition of the Liquidity Coverage Ratio in 2015 and the reform of money market funds a year later. Large banking institutions now have an incentive to borrow more from FHLBanks and less from private short-term money markets thanks to the preferential treatment in the LCR. Also, while FHLBank use of short-term funding has seen an uptick for several years, the report noted...