No. The FDIC can borrow from the Treasury. Not the Fed. The Fed backstops’ banks liquidity. The FDIC backstops banks’ solvency inasmuch as it affects insured deposits.
We needed new laws in 2008 because the Fed’s backstop alone was insufficient. These banks weren’t just illiquid, they were insolvent. TARP gave them liquidity for “troubled assets.”
No. The FDIC can borrow from the Treasury. Not the Fed. The Fed backstops’ banks liquidity. The FDIC backstops banks’ solvency inasmuch as it affects insured deposits.
We needed new laws in 2008 because the Fed’s backstop alone was insufficient. These banks weren’t just illiquid, they were insolvent. TARP gave them liquidity for “troubled assets.”