Subject to a Run? Fed Financial Stability Report at $20.3 Trillion Say's So

The Federal Reserve’s recent Financial Stability Report paints a concerning picture, despite attempts to cast the outlook in a positive light. A standout alarming detail: $20.3 trillion of “runnable” money, especially considering smaller liabilities recently caused banking panic. The report cites vulnerabilities, such as banks under stress, prime MMFs prone to runs, and life insurers with risky assets, reminiscent of the 2008 AIG bailout. This emphasizes the Fed’s questionable approach: limitless electronic money creation to mask its supervisory failures, which undermines the U.S. financial system’s stability.