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Speech
Remarks at the New York Bankers Association Hudson Valley Regional Meeting
Remarks at the NYBA Hudson Valley Regional Meeting, Kingston, New York.
Working Paper
The 2023 Banking Turmoil and the Bank Term Funding Program
We use high-frequency data to examine the effectiveness of the Bank Term Funding Program (BTFP) in supporting the liquidity positions of vulnerable banks during the March 2023 banking turmoil. We uncover three key findings. First, our high-frequency data confirm that banks with high reliance on uninsured deposits and large unrealized losses on securities holdings suffered larger deposit outflows at the onset of the episode. Second, the BTFP played an outsized role in meeting these outflows at banks with larger securities losses, reflecting the at-par valuation of securities collateral at ...
Discussion Paper
Bond Funds in the Aftermath of SVB’s Collapse
March 2023 will rightfully be remembered as a period of major turmoil for the U.S. banking industry. In this post, we go beyond banks to analyze how fixed-income, open-end funds (bond funds) fared in the days after the start of the banking crisis. We find that bond funds experienced net outflows each day for almost three weeks after the run on Silicon Valley Bank (SVB), and that these outflows were experienced diffusely across the entire segment. Our preliminary evidence suggests that the outflows from bond funds may have been an unintended consequence of the exceptional measures taken to ...
Bank Term Funding Program Provides Liquidity to Depository Institutions
The goals of the newly created BTFP are to bolster depository institutions’ capacity to safeguard deposits and ensure the ongoing provision of credit to communities and the broader economy.
Speech
Remarks on the Panel “Bank Crisis Framework: Learning from Experience”
Remarks at the Paris Meeting of the Committee on International Monetary Law of the International Law Association (MOCOMILA), Paris, France.
Discussion Paper
Calming the Panic: Investor Risk Perceptions and the Fed’s Emergency Lending during the 2023 Bank Run
In a companion post, we showed that during the bank run of spring 2023 investors were seemingly not concerned about bank risk broadly but rather became sensitized to the risk of only about a third of all publicly traded banks. In this post, we investigate how the Federal Reserve’s liquidity support affected investor risk perceptions during the run. We find that the announcement of the Fed’s novel Bank Term Funding Program (BTFP), and subsequent borrowings from the program, substantially reduced investor risk perceptions. However, borrowings from the Fed’s traditional discount window ...