> only estimated $13 billion will be printed
Not printed. FDIC would levy a special assessment on its member banks, including JPMorgan, if those costs are realised. (Note that up to $40bn of enterprise value [1] was also just destroyed.)
Not printed. FDIC would levy a special assessment on its member banks, including JPMorgan, if those costs are realised. (Note that up to $40bn of enterprise value [1] was also just destroyed.)
If you look at the Fed’s weekly lending (H.4.1), you can see the FDIC has borrowed upwards of 170B in the last 2 months, not including FRC deal. In the FRC deal, FDIC is giving JPM a 50B term loan, which is most likely again borrowed from the Fed.
There’s some speculation why this had to happen, ie the Treasury cannot provide the liquidity due to debt limit, etc…
https://bpi.com/the-mysterious-footnote-7-to-whom-and-on-wha...
I’ve seen this claim from AEI folks [1], and while I’m listening, I’m not (yet) buying it. It looks more like the BTFP [2][3]. (EDIT: It’s not the BTFP. Something screwy here, but unclear how much.)
> the FRC deal, FDIC is giving JPM a 50B term loan, which is most likely again borrowed from the Fed
Source? The press release notes a loss-sharing arrangement. No loan. (EDIT: there is a loan.)
[1] https://thehill.com/opinion/finance/3908515-the-fed-circumve...
[2] https://www.federalreserve.gov/financial-stability/bank-term...
[3] https://www.federalreserve.gov/newsevents/pressreleases/mone...
Also, FDIC bridge banks are not eligible for BTFP, because they are not eligible for the primary discount window. They are banks in default…
H.4.1: https://www.federalreserve.gov/releases/h41/20230427/
50B term loan to JPM: https://www.jpmorganchase.com/ir/news/2023/jpmc-acquires-sub...