Why Are Banks Afraid To Lend To Each Other (Even Just For One Night?)

A few weeks ago, The Fed offered $75 Billion in the overnight repo market.  $80 Billion was requested.  Some bank (or combination of banks) needed $5 Billion overnight to remain solvent and they could not get the money.

Now, the program is being expanded to $125 Billion.  What is going on?  Do banks not believe their underlying assets are not yet marked to market?

Click here for the Wall Street Journal Article: https://www.wsj.com/articles/fed-boosts-amount-of-liquidity-offered-to-financial-system-11571924640?mod=hp_lead_pos5

Torrey & Gray can help you find finance and accounting professionals that can navigate your business through these turbulent economic waters.

Business is good – but how long can your company survive if your line of credit is frozen?  What if your payroll provider misappropriated hundreds of thousands of dollars in tax withholding?  Recent news regarding the still missing $30 Million from Mypayrollhr.com highlights a risk most business leaders to not think about on a day to day basis.