Trader's Corner — Product Solution Trends from the Member Services Desk
Relationship Manager Mona Tavss sits with FHLBank San Francisco Member Financial Services Managing Director Ira Chin to learn about his role at the Bank and what solutions members are seeking during these uncertain times.
Q: Tell us about your role at FHLBank San Francisco and your typical day?
A: I lead the Member Services Desk, which is the team responsible for all trade execution of member credit products, such as advances and letters of credit. I also manage the Member Financial Services Analytics team. Most of my day involves interacting with our members to assist them with their funding and liquidity needs, although not every phone call results in an actual trade execution.
There is time spent answering questions members might have on the different products and services the Bank offers, assisting with questions about wire and drawdown requests, helping a caller navigate through the Member Portal, or discussing members’ collateral borrowing capacity or capital stock requirements.
Ultimately, we’re here to serve the members and make transacting and interacting with the Bank as smooth and efficient as possible.
Q: In the last six months what solutions have members been requesting from FHLBank San Francisco?
A: With rates on the rise as the Federal Reserve tries to tame inflation, we’ve certainly seen an increase in advance borrowings with short-tenored maturities.
That said, we’ve also seen members locking up longer maturity advances as rates continue to climb. Some members are using our Adjustable Rate Advances based on the SOFR index to add floating rate liabilities on their balance sheets.
Q: During these uncertain times, how can FHLBank San Francisco help members?
A: We strive to offer products that help members manage their interest rate and liquidity risk. Members have been awash with deposits over the last two years, but as deposits levels begin to fluctuate, forward-settling advances can help members, who may not have immediate funding needs.
Members can forward settle most types of advances and lock-in advance pricing for settlement dates in the future. There’s a premium in the pricing depending on the forward curve, so members can contact their Relationship Manager or the Member Services Desk directly to price up advances for future funding dates.
Fixed Rate Advances with Prepayment Symmetry can also add flexibility to members during uncertain times. If rates fall, these advances are still subject to prepayment fees, but if rates continue to increase, members could potentially receive a prepayment credit.
These are just some of the solutions we offer. Members should contact their Relationship Manager or the Member Services Desk at (415) 616-2500 with questions about any of these products. Members can also learn more about the Bank's credit products here.