The Federal Reserve, the central bank of the United States, injected around $300 billion into the banking sector in just this week. This amount is more than twice that of the bailout made to save the same banking system in 2008.
The Federal Reserve set the dollar printing machine to full capacity after the collapse of the Silicon Valley Bank and the Signature Bank. Another US bank, the First Republic Bank managed to avoid bankruptcy due to massive financial support though US firms buyout, while the giant Credit Suisse has been saved for the time being by reserves provided by the Central Bank of Switzerland.
The US Federal Reserve printed $300 BILLION in the past week to save the banks
Half went to holding companies for Silicon Valley Bank & Signature Bank. The Fed didn't disclose the other half
— Ben Norton (@BenjaminNorton) March 17, 2023
The US Federal Reserve board meeting is scheduled for March 22, and many analysts expect that after the meeting the Fed will announce a new hike in interest rates, at least by 25 basic points.
This was the most powerful credit boost in the history of the Federal Reserve. More than $300 billion was issued to banks in one week under various lending programs through the Federal Reserve. Half of that amount has been destined to the holding companies of Silicon Valley Bank and Signature Bank.
To measure the magnitude of the monetary frenzy, it may be recalled that during the COVID crisis, the maximum weekly injection into credit programs was just over $80 billion, and during the 2008 financial crisis, in the second week after the Lehman Brothers went bankrupt, the Federal Reserve issued $146 billion.
After the Lehman Brothers’ bankruptcy on September 15, 2008, the Federal Reserve awarded banks more than $810 billion, plus $100 billion in repo operations over the course of nine weeks. All of it was incorporated during the most acute phase of the crisis. In addition, more than $500 billion were put into the financial system through exchange lines with foreign central banks to maintain liquidity in dollars.
Adding all the categories of the Federal Reserve’s balance sheet in 2008, in the first three months after the collapse of Lehman Brothers, the cumulative assistance amounted to approximately $1.3 trillion. This volume was replaced by the quantitative easing program in 2009-2010 by a comparable amount, but at a much lower intensity.
(Misión Verdad) with Orinoco Tribune content
Translation: Orinoco Tribune
- orinocotribunehttps://orinocotribune.com/author/orinocotribune/February 25, 2024