The Federal Reserve and the Treasury Department are preparing emergency measures to shore up banks and ensure they can meet potential demands by their customers to withdraw money, as the US seeks to stave off a deeper crisis after SVB Financial Group’s failure.
The Fed is planning to ease the terms of banks’ access to its discount window, giving firms a way to turn assets that have lost value into cash without the kind of losses that toppled SVB’s Silicon Valley Bank. The Fed and Treasury are also preparing a program to backstop deposits using the Fed’s emergency lending authority.
