First Republic Becomes ‘Other,’ Money Market Assets Hit New Record

First Republic’s discount window and BTFP borrowings rolled into the “Other credit extensions” line item in the Fed’s weekly H.4.1 release, which is now must-watch television for those of us with nothing better to do on Thursday evenings than make stacked bar charts.

Virtually all of the discount window borrowing was apparently attributable to the star-crossed San Francisco lender, which Jamie Dimon scooped up out of FDIC receivership earlier this week.

Borrowings from the newly-created Bank Term Funding program remained elevated, at nearly $76 billion.

When you include the “other credit extensions” line, total Fed support to the system was effectively unchanged.

The update on the Fed’s balance sheet came on a day when regional lenders were under siege yet again, as PacWest teetered and Western Alliance was at pains to dispel various rumors.

Overall, the balance sheet shrank a sixth week after a sharp rise in March coinciding with US officials’ efforts to calm the panic around SVB’s implosion.

Meanwhile, money market fund inflows were unrelenting. $47.2 billion flowed into money funds over the latest weekly reporting period, according to ICI data released on Thursday afternoon.

That took total assets to $5.31 trillion, a new record.

$37.9 billion went to government funds, split almost evenly between institutional and retail. Prime funds saw a $6 billion inflow, entirely from retail investors.

There’s no mystery here. As TD Securities’ Gennadiy Goldberg put it while editorializing briefly around another week of inflows to money funds, “Markets continued to fret about regional bank stress.”


 

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