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The US allocates $25 billion to bank payments to customers

The US government announced the creation of a program to provide funding to financial institutions

oh feeder (Central ReserveFederal Reserve Bank of America), the US Treasury and the FCDI (US Federal Credit Assurance Corporation) announced this Sunday (March 12, 2023) that it will develop a new term funding plan for banks (Bank term finance scheme, in English). According to a statement, the move will help ensure financial institutions’ ability to pay depositors.

The Treasury Department will make available up to $25 billion from the Currency Stabilization Fund for this purpose. Here it is Full Note (127 KB).

New financing for banks, credit unions and other eligible depository institutions will last up to 1 year. In return, these financial institutions must pledge U.S. Treasuries, agency debt, mortgage-backed securities or other eligible assets.

“This move will strengthen the banking system’s ability to protect deposits and guarantee continuity of money and credit to the economy.”One part says.

After that this decision was taken SVP (Silicon Valley Bank) and The Signature Bank bankrupt. Central Bank says “Ready to deal with any liquidity pressures”.

According to the report, the financial plan “This would be an additional source of liquidity against high-quality bonds, eliminating the need for a company to quickly sell these bonds during times of stress.”

Read more about the SBV collapse and its aftermath:

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