Quote:
Originally Posted by escapee  There is nothing worry about (sarcasm), The Fed will rescue all failing banks with more free credits dumped from the sky. |
Sarcasm aside, I think most people do assume that the Fed has the ability to bail out banks when they go under. This is not the case. The Fed does not have enough assets to bail out large banks.
Here is
the balance sheet of the Fed for March 20th, this week. Note the total size. Its only one third that of
Citigroup’s balance sheet.
And Citigroup is just one bank among many that could fail.