The Fed Tells Banks Not to Be Shy About Asking It for Money
- Banks worry that tapping the backstop program signals weakness
- Regulators are drafting a plan to normalize use of the program
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When Brookline Bancorp Inc. needs to borrow short-term cash quickly — part of the regular course of business for the Boston-based lender — it has a range of options. One source of cheap money it’s loath to turn to, however, is the Federal Reserve for fear of setting off alarm bells.
“This is the safety net for the financial system and for individual banks,” said co-president and chief financial officer Carl Carlson. “If you have to use the safety net, that means you missed a rung on the swing and means you needed something.”