Topic: Bank Term Funding Program

Fulton Bank is reportedly closing 18 branches after acquiring toxic assets from the failed Republic First Bank. Dr. Kirk Elliott points out that the FDIC only has enough funds to cover 1.17% of all deposits, leaving the banking system vulnerable to a run. With the expiration of the Bank Term Funding Program, Elliott predicts a new wave of bank failures as high interest rates and delinquencies pressure undercapitalized institutions.

Dr. Elliott reports that the FDIC currently only has enough assets to cover 0.74% of all U.S. deposits, down from 1.7% a year ago. He notes that U.S. bank profits dropped 44% in the last quarter and that the "Bank Term Funding Program" has expired, leaving regional banks without emergency liquidity. Jones and Elliott agree that the foundation of the economy is failing, even if it is not yet being reported by mainstream media.

Dr. Kirk Elliott joins the show to discuss the expiration of the Bank Term Funding Program (BTFP) on March 11th. He explains that during COVID, the Fed reduced reserve requirements to zero, leaving banks under-capitalized. As interest rates rise to combat inflation, banks are facing a liquidity crisis without the emergency funding that previously prevented bank runs.