It has been just revealed that $450 billion will be exiting the US banks soon. Check out the latest details about the matter below.
US banks to lose massive amounts of cash
According to analysts at Morgan Stanley, American banks could possibly lose almost $500 billion as a result of the US Treasury’s upcoming plan to introduce a new set of T-bills.
CNBC reports that Morgan Stanley predicts a total of $1.364 trillion of net T-bill issuance for the remainder of this year, with $1 trillion of that to be issued within the next four months alone.
The bank warns that this new wave of US bonds may put considerable strain on banks that cannot match the yields offered by the government.
Analyst Betsy Graseck stated the following as per the online publication the Daily Hodl:
“Our fixed income team sees most of this initial [Treasury General Account] restocking to come from bank reserves, suggesting ~$450b of gross outflows over the next four months.”
It is also important to note the fact that the US bank stocks have made a notable recovery since the pain felt earlier in the year when the industry weathered the collapse of several large institutions, according to the same online publication mentioned above.
US banks in the news
It’s been just revealed the fact that the US banks have just borrowed $100,000,000,000 from the Fed’s emergency lending platform.
According to the reports coming from the online publication the Daily Hodl, the Federal Reserve’s lending program to support US banks is in high demand as borrowings shatter $100 billion.
“The latest data from the Fed shows that its Bank Term Fund Program (BTFP) has issued loans to the tune of $100.16 billion as of June 7th, compared to $93.61 billion borrowed the week ending May 31st.”
It is also important to mention the fact that BTFP was designed to eliminate a bank’s need to sell those assets in times of distress.