Friday, November 1, 2019

Are the new consequences of Fed Repo Madness a return of the failed US banks as the fourth one of 2019 takes place on Nov. 1

Perhaps it is just coincidence, but ever since the Fed began initiating its Repo Facility back in September, a slew of bank failures have taken place over the past couple of months.  And while these three banks aren't particularly large in scope, today's newest bank failure on Nov. 1 marks the fourth financial institution to shutter its doors in a short period of time after seeing no failures in over 18 months.

If you were banking at City National Bank of New Jersey located in the city of Newark, you are now banking at Industrial Bank.

Costs to the FDIC DIF (Deposit Insurance Fund) are $2.5 million.

During, and again over the following four years after the Financial Crisis, an average of 40 banks per year closed their doors.  And while there have only been four bank failures since December of 2017, the question remains on whether this is simply an anomaly, or if the liquidity problems in the Credit Markets will lead once again to a run of future bank failures.


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