2023 Banking Crisis (General)

by dan, Monday, March 20, 2023, 16:03 (490 days ago) @ dan

Here's an interesting story:

Central banks to boost flow of US dollars amid market unease

It would seem to support the push for centralization. A few snippets:

Six central banks, including the Bank of England, announced they would boost the flow of US dollars through the global financial system.

In a statement the Bank of England, Bank of Japan, Bank of Canada, the European Central Bank, US Federal Reserve and Swiss National Bank launched the co-ordinated action to "enhance the provision of liquidity".

Translation for the bolded: to give, oh, I'm sorry, lend money to banks. Not people, mind you.

Instead of borrowing on the open market, British banks will be able to go direct to the Bank of England, and it will borrow from the US Federal Reserve.

It will work in the same way for banks in the eurozone, Canada, Japan, Switzerland and the US.

Banks will be able to access this funding on a daily basis.

Wow. So the US is effectively pumping money directly into the world central banks. I guess it has to to protect its debt, by, incidentally, adding more debt. They'll call it loans, but they're printing money to lend it, and somebody will pay for that.

The arrangement, adopted during the 2008 financial crisis and the Covid pandemic, will start on Monday and continue until "at least through the end of April", the Bank of England said.

So, business as usual. Interest rates are raised for those of us who want to buy a house or just live on credit card, but for the big boys, hey, nod and wink.

The fear is less about the direct impact of problems at Credit Suisse or Silicon Valley Bank, but instead that a set of common factors are affecting some other institutions. For example non-insured deposits pouring out of some institutions and into larger ones at incredible speed, without anyone visiting a branch, thanks to technology, and influenced by social media commentary. There has also been an uncertain response by some regulators.

And there's the centralizing factor.

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