Fed announces emergency lending facility to shore up US banks
The Federal Reserve introduced an emergency lending facility on Sunday to shore up the US banking system after the implosion of Silicon Valley Financial institution led to fears of contagion.
In a press release, the Fed mentioned it could make further funding accessible to eligible depository establishments to “assist guarantee banks have the power to satisfy the wants of all their depositors” and that it’s “ready to deal with any liquidity pressures that will come up”.
It added: “This motion will bolster the capability of the banking system to safeguard deposits and make sure the ongoing provision of cash and credit score to the financial system.”
In a joint assertion issued alongside the brand new lending facility, the Financial institution Time period Funding Program, Treasury secretary Janet Yellen, Fed chair Jay Powell and Martin Gruenberg of the Federal Deposit Insurance coverage Company mentioned that each one depositors of Silicon Valley Financial institution would have entry to their cash on Monday.
All depositors of Signature Financial institution, which they mentioned had closed, would even be paid in full.