Funding and Fiscal Affairs, Loan Policies and Operations, and Funding Operations; Investment Management

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The Farm Credit Administration (FCA), by the FCA Board (Board), proposes to amend the investment regulations to provide Farm Credit System (Farm Credit, FCS, or System) banks with a broader array of eligible investments. Under the proposed regulations, Farm Credit banks are expected to hold only high-quality and liquid investments to maintain a liquidity reserve, invest surplus funds, and manage interest rate risk. The proposal provides System banks with guidance on sound practices for managing risks associated with investment activities and grants System banks greater flexibility to manage risk on an institutional, portfolio, or individual instrument level. These amendments are also designed to better enable FCS banks to adjust to the rapid and continual changes in the financial markets.