Chicago Tribune (04/08/08)
Merger talks between the Federal Home Loan Banks (FHLBs) of Chicago and Dallas had been ongoing since August, but they recently ended without a resolution. Dallas FHLB President and CEO Terry Smith said, "There is a strong strategic fit between both banks' memberships. However, we have been unable to reach a definitive agreement." Reasons for the breakdown in negotiations have not been disclosed, but Chicago FHLB Chief Executive Mike Thomas has announced his departure from the bank. The Chicago bank has been hit hard by losses associated with derivatives trades, and the failed deal could hurt its capital levels in the short term. Observers say the situation also presents a challenge for the Federal Housing Finance Board, which has promoted mergers among the FHLBs to strengthen the system.
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