-Borrowers expected to withdraw deposits after end of TAG.
Global Banking News - 31 December 2012
According to a survey carried out by the Federal Reserve, large borrowers such as insurance companies and hedge funds are expected to withdraw funds from commercial banks with the expiry of the extended transaction accounts guarantee (TAG) programme by the end of 2012.
The quarterly survey said that funds withdrawn from commercial banks would be re directed and parked in securities such as repurchase agreements, money markets funds or treasury bills.
With the expiry of the extended TAG, insurance provided by the Federal Deposit Insurance Corp. on non-interest bearing check in accounts will revert to the ceiling of USD250,000.
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