Ny Fed Cash Transfers to Banks Increase Dramatically in Q4 2025

The chart is about 'repo operations.' I don't think I trust this website to properly explain what those are or what it means.

Here's a less editorialized article from Reuters: https://www.reuters.com/business/finance/banks-tap-record-li...

> [JPMorgan Chase & Co.] revealed it is on the hook to deliver more than 5,900 tons of silver it doesn’t have. ... The bank sold contracts for silver it didn’t own, expecting the price would fall.

Where was the stress test for that little gamble?

Where is the source for the claim that JPMorgan has to deliver silver it doesn't have?

This appears to be an alarmist article about something pretty pedestrian. 1. The fed has intentionally been pulling liquidity out of the system with quantitative tightening. Over the last few years, the fed has shrunk its balance sheet by several trillion dollars (many times what this article is talking about). The fact that there is liquidity tightness is a sign that the fed has succeeded. And they are already stopping their balance sheet run-off, so there is no reason to expect this to get worse. 2. Repos are a standard tool of the fed. This is the system working as designed when there are liquidity issues. 3. It is not even clear to me that there are liquidity issues. This looks more like window dressing. On the 31st, banks and others make themselves look a bit prettier for their regulators and shareholders by holding more cash. This always makes overnight funding a little more expensive overnight on the 31st, so more banks are more likely to use fed lines, either repos or fed funds. That doesn't mean there is a problem or sone kind of shadowy bail out. This happens every year, and to a lesser extent, every quarter end.

The way that this is written feels intentionally exaggerated. E.g. comparing how much banks earned in profit to how much they are pulling/could pull from thr fed makes no sense. Banks are highly levered. They earn low returns on assets (1-2%), so balance sheet items always look a lot bigger than profits. Thats just the business model of banks. Just wait to see how many years it will take them to earn enough money to pay back their deposits! Its comparing apples and oranges, and anyone who thinks about banks seriously knows that.

This is typical garbage finance reporting. This is nothing more than overnight repo. It is a normal exchange of marketable securities for cash (or reverse). It is very common to see huge increases at quarter-end and year-end. This is not a "secret bailout". What about this article is exclusive as they claim in the header?

It looks like the gist of the article's assertion is that since the Fed has ramped up repo operations since October 2025, they're seemingly covering a liquidity crunch being experienced by big banks. This support this assertion with the fact the fed eliminated the $500b limit in asset value that the Fed can give loans for [1] (although a max of $40b still exists per proposition*). The article also links a possible motivation in JP Morgan being in a losing short on silver in the commodities market.

The article is wordier than it needs to be, but I think it presents a solid argument. Some other interesting things I've observed is that the discount window website started advertising 'Discount Window Direct' on its homepage in June [2] (which could be a sign that there has been more inquiries about it) and that the pickup in the repo market being in the latter half of 2025 might also be correlated with the closing of the Bank Term Funding Program in March 2025 [3][4].

[1] https://www.newyorkfed.org/markets/opolicy/operating_policy_...

[2] https://www.frbdiscountwindow.org/

[3] https://www.federalreserve.gov/newsevents/pressreleases/mone...

[4] https://fred.stlouisfed.org/series/H41RESPPALDKNWW

It's not a bailout but the private market should be able to clear trades without central bank resort

so, watch this space

Why are big banks so dependent on repeatedly borrowing from the Fed? These banks wouldn't even exist if not for the Fed bailing them with cheap loans or free money ever so often. I will say what I have always said... these banks should be allowed to fail.

I think it's just repo:

> In accordance with the FOMC implementation note issued December 10, 2025, the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York will make the following adjustments to standing overnight repurchase agreement (repo) operations effective December 11, 2025.

https://www.federalreserve.gov/monetarypolicy/standing-overn...