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Fair. Thought you were talking about making SVB depositors whole. I’d call the BTFP a mechanism to stabilize the banking system in the US, given rising interes
by ejdyksen 4y ago
Fair. Thought you were talking about making SVB depositors whole.
I’d call the BTFP a mechanism to stabilize the banking system in the US, given rising interest rates. I guess I don’t care as much about the semantics, though.
- pishpash 4y agoIt wipes out losses accrued up to March 12, 2023 on eligible securities, for one year. It's taxpayer funded. Terms are super generous: only a 10bp premium. It's at least a bailout for one year. It may or may not get extended.
- slv77 4y agoIt also works against the Federal Reserves stated policy of shrinking their balance sheet due to inflation.
- pishpash 4y agoI do think it's somewhat clever. It basically lets the private banking sector control the pace of QT. If liquidity dries up somewhere in the system it does a one-year targeted QE.