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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
Overall there is almost nothing on the latest Federal Reserve balance sheet release to suggest any renewed distress in the US banking sector in late May.
- Emergency liquidity facilities at the Fed saw a further $3.3B drawdown in the week to May 31, according to Fed data out Jun 1. Once again, this was largely driven by a fall in "Other credit extensions" - which is the line item for Fed lending to FDIC bridge bank entities for resolution purposes.
- Having peaked at $228.2B in early May, the $4.5B drop in the past week brings the total size down to $188.1B (which will wind down over the coming months).
- Meanwhile the other prevalent theme in recent weeks - flat-to-declining discount window borrowing (-$0.2B to $4.0B) alongside a new peak in the Bank Term Funding Program (+$1.7B to $93.6B) - continued to play out.
- Some analysts see this as suggestive of stress in the banking sector, but we do not regard it as a particularly worrying development. The steady rise is more indicative of banks taking advantage of generous financing terms under the program rather than requiring emergency funding.
Source: Fed, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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