Graphiques de la semaine

The liquidity positions of major US banks have not improved

ECONOMIC RESEARCH DEPARTMENT  
United States: The liquidity positions of major US banks have not improved  
In the end, the US Federal Reserve (Fed) did not wait for the next corporation tax payment deadline in April before  
intervening in the money market. In an attempt to stave off the risk of pressures on the market as a result of the  
coronavirus outbreak, it increased the scale of its repo transactions on Monday 9 March. At the end of last week, demand  
for cash from primary dealers far outstripped what the Fed was offering.  
Although the Fed has injected nearly USD 480 billion in additional central bank money since mid-September, the liquidity  
position (immediately available cash) at major US banks has not improved. On the one hand, bank reserves with the Fed  
have increased by only USD 280 billion, due to the growth in the Treasury’s general account. On the other hand, the major  
banks have absorbed a large part of the collateral issued, either through outright purchases or indirectly through the forced  
retention of securities by their primary dealers.  
Average Liquidity Coverage Ratio (LCR) of the 8 US G-SIBs  
USD bn  
2
2
1
1
500  
000  
500  
000  
125%  
120%  
115%  
110%  
105%  
100%  
High Quality  
Liquid Assets  
(HQLA):  
Reserves with  
the central  
bank (Level1)  
LCR  
Claims on  
public issuers  
(Level 1)  
GSE MBS  
Level 2A)  
(
5
00  
0
Corporate bonds  
ordinary  
&
shares  
(Level 2B)  
June Sept Dec March June Sept Dec March June Sept Dec  
017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019  
2
Source: LCR disclosures, SEC 10-Q reports, BNP Paribas  
economic-research.bnpparibas.com  
Céline Choulet  
11 March 2020  
QUI SOMMES-NOUS ? Trois équipes d'économistes (économies OCDE, économies émergentes et risque pays, économie bancaire) forment la Direction des Etudes Economiques de BNP Paribas.
Ce site présente leurs analyses.
Le site contient 2416 articles et 619 vidéos