Banks: The Big Picture
The Macro Trading Floor
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The Fed Expects Banks to Take Conservative Decisions
The Fed is acutely aware that banking stress of any sort is disinflationary through the channel of credit creation. So as a bank, if you are worried that your liquidity situation might worsen, you allocate more resources and capital to make sure that your balance sheet is somehow stronger. When that happens, the rate of change of credit creation is negative. The Fed seems to be much more on a delegating kind of situation.
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