What did the regulators just do?
The Fed has come out and said that anyone with “high quality” debt like US Treasuries can pledge it as collateral and get back par value for up to a year. So, you bought a Treasury Note for $100 in 2021, it’s now worth $95. Whatever you do… DO NOT SELL IT. Instead, come to the Fed and they will give you $100 for the debt. Treasuries don’t get dumped on the market and everyone is made whole. BOOM, everyone wins and problem solved....for a little while longer anyway.
And then right as the one year anniversary approahces and everybody anxiously awaits the crash, they'll extend it another year....rinse and repeat.
This Brand New Program saves SVB and other failing banks bacon as their balance sheets are all heavy with US Treasuries, once the safest asset to hold, but with recent interest rate hikes, losing their value by the week. As SVB and others were forced to dump their lowered value treasuries, they were bleeding cash while simultaneously causing a huge scare in the bond market.
So the Fed will pay above FMV for these declining treasuries, presumably no matter how low they drop, with "currency printed out of thin air" and in the process kill two birds with one stone.....with the stroke of the almighty pen.
Innovative can kicking....
Also known as an inflationary tax on the people.
If they manage to eliminate every negative consequence on the markets and banks by simply printing more money, the only way this all ends up is hyperinflation of the US dollar. And in that situation, everyone loses (except the elites and politicians who will no doubt be able to trade their worthless dollars for something more stable just before the bottom falls out because they received a heads up to the coming inflationary collapse).