RE:RE:Fed to backstop SVB AND Signaturecampst wrote: This would have been unthinkable before QE.
Thinking in writing. This will, in effect, increase the money supply as the FED will 'print' money pay out to depositers. One might say that the entire economy is taking some sort of hit.
This seems like a good option at first glance, although there will be a mound of details to work out. In the case of SVB, the newly acheived stability may allow for sale of the company.
One concern that comes to mind is this "New class" of account. It seems to be positioned as a tool that can and will be used again. Let the debating begin.
Most of the deposits will be covered with the sale of SVB's assets and from the loans being moved to other banks. From what I understand, the net deficit, if there is any, will be passed through as a fee to all banks in the US system. In that sense, for SVB, there will likely not be "money" printed out.
The Fed will also make 1 year loans against assets such as Fed bonds, MBS, and other assets categorized as "high quality", so the various banks should be able to access short term funds to cover "bank runs". While this will temporarily add liquidity to the market, negating the fear and the effects of bank runs is a higher short term priority.
Anyhow, for AT, they won't lose any money so it's a really good news.