Original Main St Mama asks: “Who determines if a bank is ‘systemically important?’”

When in trouble, like today’s volatile economic climate, the ECB, BOJ, or Bank of England might all say, “We need a billion dollars in American greenbacks.” It’s like a lifeline. They call it the “lender of last resort” status. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ BONUS CONTENT | April 14, 2023 |  [Sign Up]( [The Motley Fool Offer]( , “Who determines if a bank is ‘systemically important?’” Original Main St Mama asks on YouTube. “The same folks who determined which businesses were essential and allowed to be open during the Pandemic?” It's a great question. And there's definitely a culprit. As usual, this incredible power falls in the hands of the Federal Reserve. In our last Session with Marin Katusa, we introduced “[swap lines.]( According to federalreserve.gov, the theory goes like this: …Swap lines are designed to improve liquidity conditions in dollar funding markets in the United States and abroad by providing foreign central banks with the capacity to deliver U.S. dollar funding to institutions in their jurisdictions during times of market stress. So when in trouble, like today’s volatile economic climate, the ECB, BOJ, or Bank of England might all say, “We need a billion dollars in American greenbacks.” It’s like a lifeline. They call it the “lender of last resort” status. Now, when it comes to an economic situation like today, the Fed and Treasury have to choose their battles. Inflation? Recession? Collapse? Janet Yellen and Jerome Powell are trying to figure out: “Hmm… We enacted this mandate for interest, but the banks are collapsing. What now?” From a monetary standpoint, they can’t bail out all the banks if they want to continue the war on inflation. And that’s why Janet Yellen is saying, “Well, we'll take it on a case by case basis.” Most likely, they will continue to fund whoever will take on failing banks. They did that by backing JP Morgan, who took on First Republic for $30 billion. And they’ll do it again. The real fear is that failing banks will no longer get a second chance. They’re going to consolidate the ones who have failed into banks that can prove they’ll survive, then going back to these survivors. And the world’s banks will have to rely on swap lines to meet further economic pressures. So what can we expect next? And where does our own money fit into the equation? That’s what I'm covering Monday during my presentation on the Wealth365 Summit. I’ll talk about: - The real reason banks are in danger of collapse - What this means for the market and (more importantly) for investors - My 3-step approach to investing in good times and (especially) bad, and how you can make more money when everything else is falling apart  - The real winners in a collapse, and how to make sure attendees are in that group when it’s all said and done. [Click here to join me for my free Wealth365 Summit Presentation.]( Follow your own bliss, Addison P.S. The main thing: a nuanced understanding of the economic machine allows free-thinking individuals to make intelligent, informed decisions about their own money as it relates to the greater whole. That’s what I’ll be talking [about on Monday at Wealth365.]( The Daily Missive from The Wiggin Sessions is committed to protecting and respecting your privacy. 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