I’m glad you’re addressing this matter today. When I first heard that it was ‘uninsured’ funds being transferred, I thought, is that going to be good enough to inspire depositors’ confidence? But what you say makes sense - the other banks will eventually have a shark fest, carving up and devouring the next big bank to go under. This is t…
I’m glad you’re addressing this matter today. When I first heard that it was ‘uninsured’ funds being transferred, I thought, is that going to be good enough to inspire depositors’ confidence? But what you say makes sense - the other banks will eventually have a shark fest, carving up and devouring the next big bank to go under.
This is the first time I’m hearing about the Fed’s new Bank Term Funding Program, so I know nothing about it. As time goes by, could you please let us know what you think of it? Is it a good idea, is it working out as planned, are there particular downsides to the program that you can see developing? Thanks!
The Bank Term Funding Program is, of course, part of the government's "backstop" erected post-SVB to head off future bank runs.
That 11 big banks plowed $30 Billion into First Republic AFTER the program was set up does not speak well of the program's efficacy thus far.
I will note that short term loans by the Federal Reserve have spiked this past week to recession-level highs. Some of that is BTFP lending, and the rest is through the Fed's traditional lending channels such as the discount window.
All this has been done to allow banks to kick the $620 Billion debt securities portfolio impairment can down the road, the can they have been avoiding resolving since interest rates first began rising in 2021 (BEFORE Powell started raising the federal funds rate in 2022).
I’m glad you’re addressing this matter today. When I first heard that it was ‘uninsured’ funds being transferred, I thought, is that going to be good enough to inspire depositors’ confidence? But what you say makes sense - the other banks will eventually have a shark fest, carving up and devouring the next big bank to go under.
This is the first time I’m hearing about the Fed’s new Bank Term Funding Program, so I know nothing about it. As time goes by, could you please let us know what you think of it? Is it a good idea, is it working out as planned, are there particular downsides to the program that you can see developing? Thanks!
The Bank Term Funding Program is, of course, part of the government's "backstop" erected post-SVB to head off future bank runs.
That 11 big banks plowed $30 Billion into First Republic AFTER the program was set up does not speak well of the program's efficacy thus far.
I will note that short term loans by the Federal Reserve have spiked this past week to recession-level highs. Some of that is BTFP lending, and the rest is through the Fed's traditional lending channels such as the discount window.
https://fred.stlouisfed.org/graph/?g=11ma7
All this has been done to allow banks to kick the $620 Billion debt securities portfolio impairment can down the road, the can they have been avoiding resolving since interest rates first began rising in 2021 (BEFORE Powell started raising the federal funds rate in 2022).
https://fred.stlouisfed.org/graph/?g=11my9