Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Federal Reserve Lends US banks about $12 Billion

Fri 17 Mar 2023 | 04:31 AM
Taarek Refaat

The US Federal Reserve's loans to US banks amounted to nearly $12 billion, amid a move to ease pressures on the financial system in the aftermath of the collapse of the Silicon Valley bank (SVB).

In a statement, the US Federal Reserve announced that the amounts due under the "temporary financing program for banks" had reached $11.9 billion by Wednesday.

On Sunday, the Federal Reserve, in cooperation with the Treasury Department and the Federal Deposit Insurance Corporation revealed the loan program to spare other banks the liquidity problems that prompted the “Silicon Valley Bank” to collapse, as the program provides additional financing to “help ensure that banks are able to meet the needs of all depositors,” as stated in the Federal statement.

On her part, Treasury Secretary Janet Yellen told senators on Thursday that authorities moved quickly to protect depositors at Silicon Valley and Signature banks, which also collapsed, after they saw a "serious risk of contagion" in the banking sector.

The shares of a number of regional banks, led by the “First Republic”, fell, days after the collapse of the SVB due to concerns about its long-term financial situation, while the markets responded positively after a group of 11 of the largest US banks announced, including “Bank of America”, “Citigroup”, “JP Morgan”, and “Goldman Sachs” on Thursday depositing $ 30 billion in “First Republic”.

The group said in a statement that its actions reflect "confidence in the country's banking system".