The Federal Home Loan Bank of Boston plans to save $3 million from its budget by eliminating 18 positions and slashing other costs, according to a letter to members posted to the FHLBB’s Web site.

CEO Edward A. Hjerpe III, who was appointed to his position this summer, assured member institutions that the FHLBB’s core business of providing liquidity was strong and would continue to be so. However, the letter acknowledged the bank’s problems: A deflated investment portfolio has already caused the bank to suspend stock investment dividends, cut off the repurchase of excess stock and trim its affordable housing program.

An efficiency and expense review prompted the job cuts, which was part of a 5 percent reduction in the expense budget that includes salary and other expenses as well.

"We do not take such actions lightly. Several long-time colleagues and loyal employees of the bank will be moving on, as we had to eliminate some positions that cannot be supported in the current operating environment," Hjerpe wrote.

The letter also contained a promise that member banks would see new credit product offerings in the next few months, improved productivity through a review of the bank’s technology functions, some added resources for risk management and "more flexible approaches to support future activity-based capital requirements for our members."

The letter included the hint of more future restructuring, saying, "we will continue to review our risk position, our staffing, and our services."