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BitMex founder gives Fed advice on defeating bank crisis

Press Releases Crypto News Crypto-News BitMex founder gives Fed advice on defeating bank crisis

In a series of tweets, Arthur Hayes, one of the co-founders of the BitMex exchange, discussed using swap lines’ as a possible solution for the Fed to provide liquidity to financial institutions without provoking s political controversy.

Hayes claimed that it is politically toxic for the Fed to be seen rescuing overseas banks while many local small banks also need assistance. On the other hand, he observed that the Fed could not ignore that non-US institutions were selling treasuries into a liquid market, which caused more volatility.

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It’s politically toxic for the Fed to be seen bailing out foreign banks when so many small domestic banks need help.

But the Fed can’t have foreign banks dumping treasuries into an liquid market and further fucking shit up.

— Arthur Hayes (@CryptoHayes) March 20, 2023

The solution proposed by Hayes includes the Federal Reserve providing a swap line to a large central bank, such as the European Central Bank (ECB). This approach would enable them to have treasuries at par, provide the banks with dollars, and deal with deposit outflows without selling treasuries.

Swap lines are agreements made between central banks. They are essential because they enable central banks to trade currencies with each other. Consequently, the FED could provide the ECB with the necessary dollars via the swap line. Hayes postulated that, in this case, no sales of treasuries would occur.

US monetary issues

Significantly, these claims come amid repeated allegations that the United States government had “created out of thin air” a total of $300 billion to bail out financially troubled institutions that saw Go to Source to See Full Article
Author: Brenda Mary

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