The Fed will provide $ 1.5 trillion to stimulate financial markets. Chinese authorities followed suit



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The Fed will provide $ 1.5 trillion to stimulate financial markets. Chinese authorities followed suit

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The US Federal Reserve has decided to inject $ 1.5 trillion into the financial system to calm the panic in the markets caused by the spread of coronavirus.

“These changes are being introduced to eliminate the very unusual disruptions in the treasury finance markets associated with the outbreak of the coronavirus,” the Fed said in a statement.

The announcement followed statements by the Fed branch earlier this week that it would increase the maximum amount of repo loans (a loan of money secured by securities) for Wall Street financiers from $ 100 billion to $ 175 billion.

In parallel, the People’s Bank of China is now pouring $ 79 billion into the country’s banks, lowering the required reserve ratio for some banks from 1.5% to 1.0%.

China’s central bank pumps $ 79 billion into banks to aid its virus-weakened economy

Other world central banks also contribute to the normalization of the situation in the financial markets. Thus, the Reserve Bank of Australia poured $ 8.8 billion into the banking system through short-term repos.

Bank of Canada yesterday announced that it will hold a repo with a maturity of 168 days for $ 4 billion and a maturity of 350 days for $ 3 billion on March 17. will continue to conduct regular repos for 1 and 3 months, but may change their frequency, volume and timing depending on the market situation

The Norwegian Central Bank today made an unexpected decision to reduce the rate from 1.5% to 1.0%. The Swedish Riksbank decided to provide banks with $ 51 billion in loans for a period of 2 years and with a varying rate equivalent to the repo rate, which is now 0%.

The injection of trillions of freshly printed dollars into the financial system reminded the Fed of the unprecedented efforts during the 2008 crisis and subsequent years to save the banking system from bankruptcy.

It is known that the creator of bitcoin Satoshi Nakamoto included in the genesis block the news headline in The Times: “The Chancellor is ready to provide repeated assistance to banks.” The headline is an unambiguous allusion to the 2008 crisis and how governments, through taxpayer money, save large financial institutions from bankruptcy.

“The main drawback of traditional money is that they need trust – we must believe in the honesty of central banks, but the story is full of examples where banks undermined this trust by devaluing fiat money,” the creator of the first cryptocurrency wrote.

Satoshi Nakamoto’s bold response to the heedlessness of the financial system, to its reluctance to take risks, the negative consequences of which affect “Spanish grammar experts”, but not “white-collar workers”, the “printing press” that constantly turns on at the moment of the slightest economic upheaval , as we know, and Bitcoin has become.

Recall, recently in the US Federal Reserve announced the study of the possibility of issuing a digital dollar.

The Fed will provide $ 1.5 trillion to stimulate financial markets. Chinese authorities followed suit



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