RICHMOND, Virginia Could 23 (Reuters) – U.S. banks must be ready to borrow commonly from the Federal Reserve’s low cost window, whereas the Fed ought to be sure loans will be accessed at any time given adjustments within the velocity of banking and transactions, Dallas Fed President Lorie Logan mentioned on Tuesday.
The speedy run on and sudden failure of Silicon Valley Financial institution confirmed “how the mix of the speedy unfold of knowledge and the velocity of monetary transactions…put a premium on banks’ efficient administration of liquidity dangers,” Logan mentioned in feedback at a Richmond Fed convention. “Each financial institution must be totally ready,” to borrow from the Fed, Logan mentioned, including “our liquidity backstop must be obtainable every time” banks want it.
Reporting by Howard Schneider; Enhancing by Andrea Ricci
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