The US Federal Reserve is taking emergency action to save the situation in the US banking market, pumping the economy with huge amount of money. So, in one week, the banks received about 300 billion dollars under various loan programs, which became a kind of record for such state aid in such a short time.
So, in just one week, 60% of the nine-month balance reduction program was neutralized. Washington’s measures to fight inflation have actually turned into their opposite.
At the same time, in the era of the fight against covid, the state has allocated about $80 million a week for the establishment of credit programs. In addition, in the first three months, $2.8 trillion was spent on securities buybacks, bank and corporate loans, bank repos and swap lines.
In 2008, a week after financial firm Lehman Brothers went bankrupt, $146 billion was provided to banks. In total, in nine weeks, 810 billion dollars were injected into the banking sector, plus 100 billion additional dollars in repos. An additional $500 billion was received by foreign financial institutions to maintain dollar liquidity.
As part of the fight against the current crisis, the Fed issued loans under the BTFR system for an amount of about 12 billion dollars in just one week, another 147 billion dollars were transferred through the window of discount and approximately $143 billion was provided in cooperation with the Federal Deposit Insurance Corporation. Apparently, Washington has completely abandoned the fight against inflation and the tightening of monetary policy.
Photos used: Adam Fagen/flickr.com
For latest updates and news follow The Eastern Herald on Google News, Instagram, Facebook, and also on Twitter.
Click here to show your support.