So far the US banks have been maintained by their ability to offload their high risk securities onto the Federal Reserve by exchanging them for US govt backed securities. When this facility was massively extended in January 2008 the Federal Reserve had about $800 billion in govt securities to exchange and these are likely to run out by the end of this year. I wonder what tricks Ben Bernanke will pull out of his hat when he runs out of govt securities and how that will impact on world financial markets?
