TechFlow news — JPMorgan said the Federal Reserve's emergency lending program could inject up to $2 trillion into the U.S. banking system to ease liquidity strains.
"Usage of the Federal Reserve's Bank Term Funding Program could be substantial," wrote strategists led by Nikolaos Panigirtzoglou in a client report on Wednesday. They noted that while the largest banks are unlikely to use the facility, the maximum potential scale envisioned under the program approaches $2 trillion—representing the face value of bonds held by U.S. banks outside the top five institutions.
Although the U.S. banking system still holds $3 trillion in reserves, a significant portion is concentrated at large banks, JPMorgan's strategists wrote. They said tightening liquidity conditions stem not only from the Fed’s quantitative tightening but also from rising interest rates driving funds out of bank deposits and into money market funds.
Earlier on March 13, following the collapses of Silvergate Capital, Silicon Valley Bank, and Signature Bank, the Federal Reserve announced it would provide $25 billion in emergency loans to eligible depository institutions.Original link
