The Blubber

US Fed says Fed and central banks of England, Canada, Japan, ECB and Switzerland announce coordinated action to enhance the provision of liquidity via the standing USD liquidity swap lines.

Their full statement:

he Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.

To improve the swap lines' effectiveness in providing U.S. dollar funding, the central banks currently offering U.S. dollar operations have agreed to increase the frequency of 7-day maturity operations from weekly to daily. These daily operations will commence on Monday, March 20, 2023, and will continue at least through the end of April.

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Meanwhile, economists said they found 186 banks that may be prone to similar risks such as Silicon Valley Bank, per WSJ.

Read the abstract of the paper references:

The U.S. banking system’s market value of assets is $2 trillion lower than suggested by their book value of assets accounting for loan portfolios held to maturity. Marked-to-market bank assets have declined by an average of 10% across all the banks, with the bottom 5th percentile experiencing a decline of 20%. We illustrate that uninsured leverage (i.e., Uninsured Debt/Assets) is the key to understanding whether these losses would lead to some banks in the U.S. becoming insolvent-- unlike insured depositors, uninsured depositors stand to lose a part of their deposits if the bank fails, potentially giving them incentives to run. A case study of the recently failed Silicon Valley Bank (SVB) is illustrative.

Read more: https://unusualwhales.com/news/economists-said-they-found-186-banks-that-may-be-prone-to-similar-risks-such-as-silicon-valley-bank