The Federal Reserve’s new facility set up after the collapse of two U.S. banks last week could see up to $2 trillion of use, according to a new analysis.
The Fed last weekend set up a lending program called the Bank Term Funding Program. What’s unique about it is that banks are allowed to pledge collateral at par, at a time when those securities are trading at a loss due to the surge in interest rates over the last year.
The downturn in bond prices was among the factors that led to the collapse of SVB Financial SIVB, -60.41%.
Analysts at JPMorgan led by Nikolaos Panigirtzoglou point out that six regional banks o...