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Technically, the Fed has been providing most of the liquidity to the FDIC in the last 2 months. The FDIC isn’t liquid. This most definitely is “printing” money

Technically, the Fed has been providing most of the liquidity to the FDIC in the last 2 months. The FDIC isn’t liquid. This most definitely is “printing” money as the Fed generates money in the system when it lends. If you look at the Fed’s weekly lending (H.4.1), you can see the FDIC has borrowed upwards of 170B in the last 2 months, not including FRC deal. In the FRC deal, FDIC is giving JPM a 50B term loan, which is most likely again borrowed from the Fed. There’s some speculation why this had to happen, ie the Treasury cannot provide the liquidity due to debt limit, etc… https://bpi.com/the-mysterious-footnote-7-to-whom-and-on-what-terms-is-the-fed-lending-173-billion/ https://bpi.com/the-mysterious-footnote-7-to-whom-and-on-wha...

JumpCrisscross 3y ago
> the Fed has been providing most of the liquidity to the FDIC in the last 2 months I’ve seen this claim from AEI folks [1], and while I’m listening, I’m not (yet) buying it. It looks more like the BTFP [2][3]. (EDIT: It’s not the BTFP. Something screwy here, but unclear how much.) > the FRC deal, FDIC is giving JPM a 50B term loan, which is most likely again borrowed from the Fed Source? The press release notes a loss-sharing arrangement. No loan. (EDIT: there is a loan.) [1] https://thehill.com/opinion/finance/3908515-the-fed-circumvented-the-debt-ceiling-to-borrow-billions-for-failed-banks/ https://thehill.com/opinion/finance/3908515-the-fed-circumve... [2] https://www.federalreserve.gov/financial-stability/bank-term-funding-program.htm https://www.federalreserve.gov/financial-stability/bank-term... [3] https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm https://www.federalreserve.gov/newsevents/pressreleases/mone...
- snake_doc 3y ago
  No, the BTFP is a separate line on the weekly lending release H.4.1. The lending to FDIC is entirely separate (on the line after). Also, FDIC bridge banks are not eligible for BTFP, because they are not eligible for the primary discount window. They are banks in default… H.4.1: https://www.federalreserve.gov/releases/h41/20230427/ https://www.federalreserve.gov/releases/h41/20230427/ 50B term loan to JPM: https://www.jpmorganchase.com/ir/news/2023/jpmc-acquires-substantial-majority-of-assets-and-assumes-certain-liabilities-of-first-republic-bank https://www.jpmorganchase.com/ir/news/2023/jpmc-acquires-sub...
  - deleted 3y ago
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JumpCrisscross 3y ago

> the Fed has been providing most of the liquidity to the FDIC in the last 2 months I’ve seen this claim from AEI folks [1], and while I’m listening, I’m not (yet) buying it. It looks more like the BTFP [2][3]. (EDIT: It’s not the BTFP. Something screwy here, but unclear how much.) > the FRC deal, FDIC is giving JPM a 50B term loan, which is most likely again borrowed from the Fed Source? The press release notes a loss-sharing arrangement. No loan. (EDIT: there is a loan.) [1] https://thehill.com/opinion/finance/3908515-the-fed-circumvented-the-debt-ceiling-to-borrow-billions-for-failed-banks/ https://thehill.com/opinion/finance/3908515-the-fed-circumve... [2] https://www.federalreserve.gov/financial-stability/bank-term-funding-program.htm https://www.federalreserve.gov/financial-stability/bank-term... [3] https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm https://www.federalreserve.gov/newsevents/pressreleases/mone...

snake_doc 3y ago
No, the BTFP is a separate line on the weekly lending release H.4.1. The lending to FDIC is entirely separate (on the line after). Also, FDIC bridge banks are not eligible for BTFP, because they are not eligible for the primary discount window. They are banks in default… H.4.1: https://www.federalreserve.gov/releases/h41/20230427/ https://www.federalreserve.gov/releases/h41/20230427/ 50B term loan to JPM: https://www.jpmorganchase.com/ir/news/2023/jpmc-acquires-substantial-majority-of-assets-and-assumes-certain-liabilities-of-first-republic-bank https://www.jpmorganchase.com/ir/news/2023/jpmc-acquires-sub...
- deleted 3y ago
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