liquidity crunch

On March 16th, JPMorgan Chase said that the Federal Reserve’s emergency loan plan may inject up to $2 trillion into the US banking system to alleviate the liquidity crunch. Strategists such as Nikolaos Panigrtzoglou wrote that the use of the Federal Reserve Bank’s term funding plan may be significant. Although the largest banks are unlikely to take advantage of the plan, the plan envisages a maximum usage scale of nearly $2 trillion, which is the nominal amount of bonds held by U.S. banks other than the top five. Although there are still $3 trillion in reserves in the US banking system, a significant portion of them are held by large banks. They said that the tightening of liquidity was due to both the quantitative tightening by the Federal Reserve and the shift of funds from bank deposits to money market funds as a result of interest rate hikes. In addition, they said that the bank’s regular financing plan should be…