Federal Reserve's $2 Trillion Liquidity Injection Plan Raises Concerns of Bailout for Struggling Banks.
The Federal Reserve's new bank backstop program could inject up to $2 trillion in liquidity, according to analysts at JPMorgan Chase & Co. The program was set up earlier this month to prevent a firesale of sovereign debt to obtain funding. The Bank Term Funding Program should be able to inject enough reserves into the banking system to reduce reserve scarcity and reverse the tightening that has taken place over the past year, the JPMorgan strategists wrote. The Fed plans to publish figures weekly in the same balance-sheet statement that it uses to reveal uptake of funding from the window.