The 12 Federal Home Loan Banks, a group that currently holds more than $100 billion in MBS, may be driven to shrink their holdings under a rule proposed this week by their regulator, the Federal Housing Finance Board. The FHFB proposal would restrict the amount of excess, or voluntary, stock that an FHLBank can accumulate and keep outstanding, and would establish a required minimum level of retained earnings for each institution. Under the proposal, excess