US banking crisis far from over, Fed loans hit $100 billion

[ad_1]

The US central bank is injecting more money to bail out the struggling banking system as the crisis continues. This could be one of the factors driving the crypto war.

The Federal Reserve’s new emergency bank loan facility just hit $100 billion in drawdown. The increase in bank funding is a clear sign that the US banking crisis is far from over.

The new funding program allows banks to secretly receive the face value of their devalued assets, noted market analyst Joe Consorti.

Use of BTFP facilities. Source: Twitter/@JoeConsortiThe banking crisis is not over

The Bank Term Funding Program (BTFP) was established in March 2023. The objective was to make additional funding available to eligible depository institutions. This would help ensure that banks can meet the needs of all their depositors, in other words, a bank bailout.

Consorti observed that banks in crisis used the fund to increase the value of their assets.

Banks turn 50 into $1 without other banks knowing they are in trouble and back off.

He added that it was a band-aid at the moment, but hidden risks are spreading.

The Wall Street Journal’s chief economics correspondent, Nick Timiraos, observed that Fed lending to banks via BTFP has hit a new high. Funding increased for the fifth consecutive week, he added.

The emergency loan for small banks was also noted by financial analyst Frog Capital who commented:

The Emergency Bank Term Funding Program (BTFP), which your Fed invented on its own and told Congress it would not exceed $25 billion, is now over $100 billion.

Federal Reserve statistical publication. Source: Twitter/@FrogNews Reasons behind the War on Crypto

Uncle Sam is doing everything he can to keep his beleaguered banking system afloat. Several major banks have already gone bankrupt this year as fears of another 2008-style banking crisis escalate.

The big banks and Wall Street have a lot of sway over federal regulators, which could explain why they’re going after crypto so hard.

Bitcoin was born out of the 2008 financial crisis when fractional reserves and toxic lending brought the system down.

Crypto is an obvious threat to the banking system, which is why they oppose it so vehemently. Just today, Binance.US lost its banking partners and was forced to suspend USD deposits.

Banks and their partners in government will continue to push to quash crypto, the biggest major threat to their profit margins to ever emerge.

Disclaimer

In accordance with the guidelines of the Trust Project, BeInCrypto is committed to providing impartial and transparent reports. This news article aims to provide accurate and timely information. However, readers are urged to independently fact-check and seek professional advice before making any decisions based on this content.

[ad_2]