Steven Kelly
@stevenkelly49.bsky.social
Financial crises & how to fight them. [email protected]
Substacking on financial stability topics at www.withoutwarningresearch.com (free)
Substacking on financial stability topics at www.withoutwarningresearch.com (free)
4/ Second: Bank balance sheets are remarkable pieces of technology for bearing interest-rate risk.
Could household, corporate, or nonbank financial companies pull this off?
Could household, corporate, or nonbank financial companies pull this off?
June 27, 2025 at 3:15 AM
4/ Second: Bank balance sheets are remarkable pieces of technology for bearing interest-rate risk.
Could household, corporate, or nonbank financial companies pull this off?
Could household, corporate, or nonbank financial companies pull this off?
"Lend freely, against good collateral, at a penalty rate"?
When rescuing an individual institution, only "lend freely" survives as good advice:
When rescuing an individual institution, only "lend freely" survives as good advice:
June 15, 2025 at 5:38 PM
"Lend freely, against good collateral, at a penalty rate"?
When rescuing an individual institution, only "lend freely" survives as good advice:
When rescuing an individual institution, only "lend freely" survives as good advice:
"Ad Hoc Emergency Liquidity Assistance in the 21st Century: Necessary, but Never Sufficient"
Our recent paper (w/ Vincient Arnold, Greg Feldberg, and Andrew Metrick) is now out as a policy brief with the European Money & Finance Forum:
www.suerf.org/publications...
Our recent paper (w/ Vincient Arnold, Greg Feldberg, and Andrew Metrick) is now out as a policy brief with the European Money & Finance Forum:
www.suerf.org/publications...
June 13, 2025 at 5:16 PM
"Ad Hoc Emergency Liquidity Assistance in the 21st Century: Necessary, but Never Sufficient"
Our recent paper (w/ Vincient Arnold, Greg Feldberg, and Andrew Metrick) is now out as a policy brief with the European Money & Finance Forum:
www.suerf.org/publications...
Our recent paper (w/ Vincient Arnold, Greg Feldberg, and Andrew Metrick) is now out as a policy brief with the European Money & Finance Forum:
www.suerf.org/publications...
Bank CFOs describing the Great Bank Re-Tranche phenomenon perfectly:
June 13, 2025 at 2:05 AM
Bank CFOs describing the Great Bank Re-Tranche phenomenon perfectly:
Episode # 10000000 of “There’s a reason we have banks and structure them the way we do”
June 1, 2025 at 8:58 PM
Episode # 10000000 of “There’s a reason we have banks and structure them the way we do”
A new FDIC disclosure shows the text of its 2023 "systemic risk exception" board resolution to rescue the SVB/Signature uninsured depositors.
As noted below, the resolution included First Republic, which wasn't ultimately closed for another 6 weeks:
As noted below, the resolution included First Republic, which wasn't ultimately closed for another 6 weeks:
May 22, 2025 at 1:42 AM
A new FDIC disclosure shows the text of its 2023 "systemic risk exception" board resolution to rescue the SVB/Signature uninsured depositors.
As noted below, the resolution included First Republic, which wasn't ultimately closed for another 6 weeks:
As noted below, the resolution included First Republic, which wasn't ultimately closed for another 6 weeks:
Bloomberg "suffered widespread disruption on Wednesday morning that prevented traders from accessing live pricing and pushed back UK and EU sovereign debt auctions."
May 21, 2025 at 9:30 PM
Bloomberg "suffered widespread disruption on Wednesday morning that prevented traders from accessing live pricing and pushed back UK and EU sovereign debt auctions."
Brazil's central bank (BCB) has announced swap agreement w/ the PBoC.
But, not to lose any friends, the press release specifically mentions also having access to the Fed's FIMA facility, "which allows the BCB to access US dollars through a repo operation."
Translated:
But, not to lose any friends, the press release specifically mentions also having access to the Fed's FIMA facility, "which allows the BCB to access US dollars through a repo operation."
Translated:
May 13, 2025 at 6:46 PM
Brazil's central bank (BCB) has announced swap agreement w/ the PBoC.
But, not to lose any friends, the press release specifically mentions also having access to the Fed's FIMA facility, "which allows the BCB to access US dollars through a repo operation."
Translated:
But, not to lose any friends, the press release specifically mentions also having access to the Fed's FIMA facility, "which allows the BCB to access US dollars through a repo operation."
Translated:
The IMF Global Financial Stability Report on the importance of the dollar swap lines, specifically for Europe:
April 24, 2025 at 1:56 AM
The IMF Global Financial Stability Report on the importance of the dollar swap lines, specifically for Europe:
4/ The list of 21st century ad hoc rescue loans we survey:
April 22, 2025 at 6:34 PM
4/ The list of 21st century ad hoc rescue loans we survey:
The Fed released 2023-Q1 discount window data today.
All the largest borrowers (pictured) were the crypto/VC banks highlighted in the paper below: SVB, Signature, First Republic, PacWest, & Western Alliance.
One additional bank sneaks in at the bottom: Customers Bank—another crypto bank.
All the largest borrowers (pictured) were the crypto/VC banks highlighted in the paper below: SVB, Signature, First Republic, PacWest, & Western Alliance.
One additional bank sneaks in at the bottom: Customers Bank—another crypto bank.
March 31, 2025 at 11:50 PM
The Fed released 2023-Q1 discount window data today.
All the largest borrowers (pictured) were the crypto/VC banks highlighted in the paper below: SVB, Signature, First Republic, PacWest, & Western Alliance.
One additional bank sneaks in at the bottom: Customers Bank—another crypto bank.
All the largest borrowers (pictured) were the crypto/VC banks highlighted in the paper below: SVB, Signature, First Republic, PacWest, & Western Alliance.
One additional bank sneaks in at the bottom: Customers Bank—another crypto bank.
3/ And there's the FIMA Repo Facility, which lends against Treasury securities & is in theory is available to any country with an account at the NY Fed (ie, not North Korea, et al). The Fed does not disclose, even to Congress, who borrows or just signs up: elischolar.library.yale.edu/journal-of-f...
March 25, 2025 at 3:58 AM
3/ And there's the FIMA Repo Facility, which lends against Treasury securities & is in theory is available to any country with an account at the NY Fed (ie, not North Korea, et al). The Fed does not disclose, even to Congress, who borrows or just signs up: elischolar.library.yale.edu/journal-of-f...
You can see why "regional banks," the midsize banks scattered across the country, took umbrage at those who took to calling 2023 the "Regional Bank Crisis":
March 7, 2025 at 11:03 PM
You can see why "regional banks," the midsize banks scattered across the country, took umbrage at those who took to calling 2023 the "Regional Bank Crisis":
New paper: "Rushing to Judgement and the Banking Crisis of 2023"
At the two-year anniversary of the crisis, Jonathan Rose and I present 7 facts that are overlooked in the standard account of the crisis: www.chicagofed.org/publications...
At the two-year anniversary of the crisis, Jonathan Rose and I present 7 facts that are overlooked in the standard account of the crisis: www.chicagofed.org/publications...
March 4, 2025 at 8:23 PM
New paper: "Rushing to Judgement and the Banking Crisis of 2023"
At the two-year anniversary of the crisis, Jonathan Rose and I present 7 facts that are overlooked in the standard account of the crisis: www.chicagofed.org/publications...
At the two-year anniversary of the crisis, Jonathan Rose and I present 7 facts that are overlooked in the standard account of the crisis: www.chicagofed.org/publications...
Rather than a blanket requirement for pre-positioning collateral, the ECB's @isabelschnabel.bsky.social says: How about you banks at least give us whatever collateral is gathering dust on your balance sheet anyways —
February 26, 2025 at 11:47 PM
Rather than a blanket requirement for pre-positioning collateral, the ECB's @isabelschnabel.bsky.social says: How about you banks at least give us whatever collateral is gathering dust on your balance sheet anyways —
Unrealized losses on banks' securities holdings bounced back up to $482 billion as of end-2024.
February 26, 2025 at 7:14 AM
Unrealized losses on banks' securities holdings bounced back up to $482 billion as of end-2024.
If press releases and headlines are any indications, big banks’ crypto projects marched on throughout the years that supervisors were allegedly choking off all things crypto-related. From 2021-2024, e.g.:
February 24, 2025 at 1:58 AM
If press releases and headlines are any indications, big banks’ crypto projects marched on throughout the years that supervisors were allegedly choking off all things crypto-related. From 2021-2024, e.g.:
It seems that Circle has removed from its website the blogs it put out when its USDC stablecoin lost its dollar peg because it had $3.3 billion of reserves stuck in SVB—& was banking with the also-failed Silvergate and Signature.
On the left is the web archive, with the right being right now:
On the left is the web archive, with the right being right now:
February 21, 2025 at 11:04 PM
It seems that Circle has removed from its website the blogs it put out when its USDC stablecoin lost its dollar peg because it had $3.3 billion of reserves stuck in SVB—& was banking with the also-failed Silvergate and Signature.
On the left is the web archive, with the right being right now:
On the left is the web archive, with the right being right now:
These comments on the debt ceiling from Pat Toomey to @davidbeckworth.bsky.social are remarkable for how unequivocal they are.
Toomey says that even in the event of the debt ceiling binding, there's "zero chance" of a missed payment on Treasuries.
Toomey says that even in the event of the debt ceiling binding, there's "zero chance" of a missed payment on Treasuries.
February 15, 2025 at 3:22 AM
These comments on the debt ceiling from Pat Toomey to @davidbeckworth.bsky.social are remarkable for how unequivocal they are.
Toomey says that even in the event of the debt ceiling binding, there's "zero chance" of a missed payment on Treasuries.
Toomey says that even in the event of the debt ceiling binding, there's "zero chance" of a missed payment on Treasuries.
Bank of England Governor Bailey says there's no justification for a *standing* liquidity facility for nonbanks.
Only *contingent* ones like the BoE's new one for pension funds and insurers:
Only *contingent* ones like the BoE's new one for pension funds and insurers:
February 15, 2025 at 3:20 AM
Bank of England Governor Bailey says there's no justification for a *standing* liquidity facility for nonbanks.
Only *contingent* ones like the BoE's new one for pension funds and insurers:
Only *contingent* ones like the BoE's new one for pension funds and insurers:
Honestly shows remarkable self-restraint that he didn’t suggest a “timeout”
January 22, 2025 at 1:02 AM
Honestly shows remarkable self-restraint that he didn’t suggest a “timeout”
NEW PAPER: Despite the often-messy politics between the Federal Reserve and the Treasury, they've worked great together in modern crises.
The exception? When they try to pool their funds: papers.ssrn.com/sol3/papers....
The exception? When they try to pool their funds: papers.ssrn.com/sol3/papers....
January 14, 2025 at 6:29 PM
NEW PAPER: Despite the often-messy politics between the Federal Reserve and the Treasury, they've worked great together in modern crises.
The exception? When they try to pool their funds: papers.ssrn.com/sol3/papers....
The exception? When they try to pool their funds: papers.ssrn.com/sol3/papers....
2/ This quote from Jim Millstein — the Treasury's chief restructuring officer in the aftermath of the financial crisis — gets at the meat of the issue.
Too often, the ratings agencies are considered as an afterthought, rather than a first-order constraint:
Too often, the ratings agencies are considered as an afterthought, rather than a first-order constraint:
January 2, 2025 at 7:27 PM
2/ This quote from Jim Millstein — the Treasury's chief restructuring officer in the aftermath of the financial crisis — gets at the meat of the issue.
Too often, the ratings agencies are considered as an afterthought, rather than a first-order constraint:
Too often, the ratings agencies are considered as an afterthought, rather than a first-order constraint:
Private credit may look like banks in some ways, but that doesn’t mean it’s the banks’ lunch private credit is eating:
December 28, 2024 at 5:13 PM
Private credit may look like banks in some ways, but that doesn’t mean it’s the banks’ lunch private credit is eating: