Flight to safety was not enough to fund credit line draws – Fed research

Many banks had to turn to non-deposit forms of borrowing, researchers find

federal-reserve

The increase in deposits in many US and US-based foreign banks during the March flight to safety was not enough to fund the increase in credit line drawdowns for larger banks, research from the Federal Reserve finds.

Many large banks still needed to turn to sources of non-deposit borrowing to meet the demand, David Glancy, Max Gross and Felicia Lonescu find. Some smaller banks also had to reduce their liquid asset holdings and short-term lending in response to credit line draws.

The drawdowns

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