So the globally financial banking system is so dire that five top central banks need to step in to avert disaster. Certainly the need to do this cannot be viewed as good news. Just how bad are things? Fed and other central banks try to head off crisis by keeping dollars flowing https://www.cnn.com/2023/03/19/economy/central-banks-fed-dollar-liquidity London CNN — The US Federal Reserve and several other major central banks announced a coordinated effort Sunday night to boost the flow of US dollars through the global financial system with the aim of keeping credit flowing to households and businesses. “The 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 US dollar liquidity swap line arrangements,” the central banks said in a joint statement. Sunday’s statement came just hours after Swiss authorities orchestrated an emergency takeover of Credit Suisse by UBS. Credit Suisse — one of the 30 most important banks in the global financial system — was bleeding money last week after investor and customer confidence collapsed. Market turmoil triggered by the second and third biggest bank failures in US history earlier this month is threatening to make it harder for people to borrow money, US Treasury Secretary Janet Yellen said last week. “If banks are under stress, they might be reluctant to lend,” Yellen said Thursday in testimony to the Senate Finance Committee. “We could see credit become more expensive and less available.” Christine Lagarde, president of the European Central Bank (ECB), told reporters Thursday that “persistently elevated market tensions” could further constrict credit conditions that were already tightening in response to rising interest rates. Swap lines are agreements between two central banks to exchange currencies. They allow a central bank to obtain foreign currency from the central bank that issues it, and distribute it to commercial banks in their country. The swap line between US Federal Reserve and the ECB, for example, enables the ECB to receive US dollars in exchange for an equivalent amount of euros. The ECB can then distribute those dollars to commercial banks in the 20 countries that use the euro. The agreements can be an important tool for preserving financial stability and preventing market tension from affecting the economy, according to the ECB. During the global financial crisis of 2008 following the collapse of Lehman Brothers, funding markets dried up because of an extreme aversion to risk. Under these circumstances it became difficult for euro area banks to obtain US dollars. From Monday through at least the end of April, the Fed and other central banks will make dollars available on a daily basis, rather than weekly. “The network of swap lines among these central banks is a set of available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses,” they added.
This banking "crisis" is ridiculous. It is media created. (Here, I include the internet.) What are those who are withdrawing their deposits, for no good reason, going to do with their money? Put it under their mattresses? The Fractional reserve banking system depends on one dollar serving many. Therein lies the amazing economic strength of the Western Democracies . For this magic to happen those dollars need to be within the banking system. One dollar under the mattress serves only one one.
Actually it's not ridiculous, if there were no internet media, the powers to be would allow the banks to fail and depositors fleeced. The internet forced them to act because they knew there would otherwise be a wide spread banking run.
Perhaps a litle reflection on the statement above is warranted. Why would any government want banks to fail????
Good question, they don't want banks to fail. The internet media helps to keep them honest, just think, autocrats love to suppress the media. So a bank fails, if there is no internet media, govt doesn't step in, but there is also less likelihood of a global reaction, there might be one locally, but govt says "tough luck buddy".
We are, just using autocrats as an example where there's media suppression. You said the banking crisis is ridiculous. I said no its not. The govt don't want banks to fail holus bolus, but they don't mind one or two banks to fail if contained. The mass media forced govt to act quickly because mass media creates contagion. In an autocracy theres no contagion due to suppression of media, just using as example.