Seattle FHLBank Hires Financial Advisers

The Federal Home Loan Bank of Seattle has hired Black Rock Financial and a firm headed by former Comptroller of the Currency Eugene Ludwig to assist it in getting its finances and management practices in order.According to officials familiar with the situation, Black Rock, including its managing director Peter Fisher, is helping the government-sponsored enterprise with its three-year business and capital management plan. (Mr. Fisher is a former top official at the Treasury Department.) Promontory Financial Group of Washington, Mr. Ludwig's group, is working on a review of the Seattle bank's management. The two firms, however, are not involved in an investigation of FHLBank stock sales by three depositories that may have redeemed stock based on nonpublic information they had access to. That review is being conducted by five nonmember directors with the assistance of an unidentified outside law firm. The Seattle GSE is forecasting possible losses for the next few years and recently disclosed a $260 million unrealized loss on its balance sheet.