Why use an FHLB Des Moines Letter of Credit?

Using an FHLB Des Moines Letter of Credit in lieu of securities offers several advantages over traditional methods of collateralizing public deposits. An FHLB Des Moines LOC enables a financial institution to leverage less-liquid collateral that is pledged to FHLB Des Moines. It also eliminates the administrative burden associated with substituting collateral, calculating mark-to-market value and adjusting collateral levels as market values fluctuate.