Anyone who thinks the Banking situation is stabilizing should know that the Federal Reserve Bank has lent $150 Billion to banks THIS WEEK ALONE!
The chart above shows this week's lending, and compares it to the "Great Financial Crisis" of 2008. It becomes instantly clear that this year, things are very much WORSE for banks than in the year 2008.
Data published by the Fed showed $152.85 billion in borrowing from the discount window — the traditional liquidity backstop for banks — in the week ended March 15, a record high, up from $4.58 billion the previous week. The prior all-time high was $111 billion reached during the 2008 financial crisis.
What this tells me is that all the legislation and rule changes done after the Great Financial Crisis . . . . didn't fix a thing. The banks seem to have gone out and done the same mismanagement and risky business they did back then, which caused that crisis.
The fact that the federal reserve has already lent more than fifty billion dollars MORE than they did at the peak of the great financial crisis, shows the banks are in worse shape now than they were in 2008. After all, they wouldn't be borrowing this money if they didn't NEED it!
It seems to me that the general public ought to carefully re-assess whether or not it is practical to continue thinking the banks "will be there." It now seems (to me) that it is well within the realm of possibility, that one day soon, we could wake up to the Headline "Banks Ordered Closed for Two Weeks; ATM's, Credit and Debit Cards ALL Shut Down" until this new bank crisis is resolved.
If that happens, you would do well to be prepared, as outlined in yesterday's story HERE
Banks rushed to borrow unprecedented amounts from the Federal Reserve's traditional backstop following SVB's collapse, new data shows.
Lenders took up $153 billion from the Fed's discount window in the week to March 15, topping a previous high of $111 billion.
Banks also borrowed $11.9 billion from the Fed's new emergency loan tool launched following SVB's downfall.
Banks rushed to borrow unprecedented amounts from the Federal Reserve as the failures of Silicon Valley Bank and Signature Bank rattled Wall Street.
Lenders snapped up $153 billion from the Fed's discount window – the traditional backstop for banks – in the week ended March 15, according to new data. That blows away the historic high of $111 billion reached during the 2008 financial crisis.
The data also showed banks borrowed $11.9 billion from the Fed's new emergency loan tool dubbed the Bank Term Funding Program, launched after Silicon Valley's eye-popping downfall.
Top economist Mohamed El-Erian reflected on the data, adding the underlying motive driving this behaviour among the banks is not yet clear.
The move followed a turbulent few days for the regional lender as fears of depositors pulling funds sparked a selloff in its share price following SVB's implosion. Silicon Valley Bank was taken over by US regulators last week after clients yanked funds in learning about a multi-billion-dollar loss on SVB's bond portfolio.
"This data will be parsed more in coming weeks if stress persists but the 11 bank consortium into First Republic will be hoped to be enough to prevent that," Deutsche Bank strategist Jim Reid said Friday, referring to the latest bank borrowings from the Fed.
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