Wonder what’s going on behind the banking scenes?

The BBJ has a story on the struggling Federal Home Loan Bank of Boston, which the paper describes as a key source of funding for area lenders. The story gives a small peek into how complex things are right now.

The bank is apparently in good fundamental shape. But it’s taking hits on private label mortgage-backed securities. Lenders are not using the bank as much as a result of its various losses and troubles.

The bottom line is that the banking system, in places, is still gummed up – and that’s one reason why a robust recovery in housing and the economy probably won’t occur soon.

File under: Stuck in low gear.