Two of the 12 Federal Home Loan Banks announced last week they are deep into merger talks that, if consummated, would create the largest single entity within the FHLBank system. The proposed merger of the FHLBank of Des Moines and the smaller, troubled FHLBank of Seattle would create an institution with more than 1,500 member financial institutions in 13 states and three U.S. territories in the Pacific Ocean. “A detailed due diligence process is...