(Washington) The American central bank (Fed) announced Thursday that it has lent nearly 12 billion dollars to American banks since Sunday, as part of its new system, announced after the bankruptcy of SVB, to enable them to honor requests. withdrawals from their customers.
The Fed pledged Sunday to lend the necessary funds to banks, in a joint statement with the Treasury Department and the banking regulator, the FDIC. The three had presented a series of measures aimed at reassuring individuals and businesses.
The monetary institution also indicated Thursday that it had, via its usual program of very short-term loans, lent 152 billion dollars to banks during the past week against barely 5 billion the previous week.
Finally, 142.8 billion dollars were lent to the two entities created by the American regulators to succeed Silicon Valley Bank (SVB) and Signature Bank, a New York brand closed automatically on Sunday by the American regulator.
A third bank, Silvergate, close to the cryptocurrency community, has also closed. Thursday is First Republic, 14e US bank by asset size and in the hot seat for several days, which was rescued by 11 major US banks. These have pledged to pay a total of 30 billion dollars in deposits.
It boosted the Fed’s balance sheet by $297 billion, which it had been shrinking since June after buying stocks during the COVID-19 pandemic to flood the market with liquidity. and allow it to continue to function.
This new increase in its balance sheet should weigh in the balance Tuesday and Wednesday, during the next meeting of the Fed, when it will make the decision to raise its rates again or not. Injecting liquidity into the economy goes against its current main objective, which is to curb inflation.