The Federal Home Loan Bank of Seattle said it expects to fall short of one of its capital requirements because of a continuing drop in the value of certain mortgage-backed securities.

The warning is the latest sign of the risk that the federal government may have to prop up some of the 12 regional home-loan banks, a vital source of funding for thousands of banks across the country, particularly small, local institutions. In September, the Treasury established a credit facility for the home-loan banks in case they have trouble raising money through their regular global debt sales.

Wall Street Journal