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In February 2020, the Federal Reserve conducted a Senior Financial Officer Survey. Responses were received from 78 banks, which in aggregate held roughly three-fourths of total reserve balances in the banking system at the time of the survey. Results released May 29.

As in previous surveys, the banks sampled in the survey represented a wide range of asset sizes and business models. Responses were collected from senior financial officers at 45 domestic banks and 33 U.S. branches and agencies of foreign banking organizations.

Part of the survey explored respondents’ ability and willingness to lend in overnight wholesale markets (both secured and unsecured). It also asked respondents to elaborate onthe factors behind these decisions, the kinds of instruments they used, and the expected risk-adjusted returns relative to the IOER rate at which they were willing to engage in such activity.

As it relates to offshore high-quality liquid assets (HQLA). A large majority, 85 percent, indicated that U.S. Treasury securities would be a likely investment vehicle, and more than two-thirds (49 respondents) also cited uncleared bilateral reverse repurchase agreements (repo).

Key takeaways from the survey included the following:

Note: lowest comfortable level of reserves, is LCLoR

• Survey respondents indicated that their LCLoR, given the constellation of short-term interest rates prevailing at the time of the survey, was approximately $650 billion, roughly unchanged relative to the previous survey. By comparison, these banks’ total average reserve balance holdings in January 2020 were roughly $1.25 trillion.
• Almost half—44 percent—of respondents rated covering routine intraday timing mis-matches between payment outflows and inflows as a “very important” consideration indetermining their LCLoR. Forty percent characterized protecting against the risk of not receiving scheduled payment inflows that could result in a negative end-of-day Fed accountas “very important.”
• A slight majority, 45 respondents, indicated that their reserve management strategyincluded a level—greater than their LCLoR—above which they would be willing to redeploy reserves into other HQLA. For those states of the world in which their reserve balances are equal to or above this level, over four-fifths of respondents (60 of 71) indicated 0–15 basis points as the lowest spread relative to the IOER rate at which they would be willing to redeploy reserve balances into other Level 1 HQLA.
• Most respondents, 86 percent, indicated that they had not altered their reserve management strategy following the money market volatility in mid-September 2019.
• More than 80 percent of respondents indicated that their redeployment of reserve balancesinto wholesale funding markets in mid-September, compared with the first week in September 2019, had remained unchanged or decreased. For those who increased their redeployment during this period, most—10 of 13 respondents—rated the attractiveness of expected risk-adjusted returns on overnight secured assets relative to the IOER rate as a “very important” factor driving these decisions.

The remainder of this summary is organized into two parts that mirror the structure of the survey, and the summary is followed by a detailed tabular presentation of responses.

Two themes emerged from respondents’ written answers. One was that operational and capacity constraints (such as counterparty credit lines, credit limits, or other balance sheet limits) had prevented them from providing liquidity support to the market in mid-September 2019. The other was that the creation of a standing repo facility could be beneficial for preventing funding market volatility in the future.

A smaller number of respondents (one or two each) touched on a variety of other issues. These issues included the timeliness of the Federal Reserve’s response to the mid-September market disruption, preferences for greater clarity from the Federal Reserve onits forward-looking plans to support money markets, and the relative attractiveness of the Federal Reserve’s repo operation pricing in the context of prevailing market rates at thetime of the survey.

Nation’s Billionaires See Net Worth Jump $434B in First Two Months of Pandemic

WASHINGTON—America’s billionaires flew far ahead financially even as the rest of America was locked down during the first two months of the coronavirus pandemic, a new report by Americans for Tax Fairness (ATF) and the Institute for Policy Studies – Program on Inequality (IPS) shows.

Between March 18—the rough start date of the pandemic shutdown, when most federal and state economic restrictions were in place—and May 19, the total net worth of the 600-plus U.S. billionaires jumped by $434 billion or 15%, based on the group’s analysis of Forbes data. The billionaires’ worth rose from $2.948 trillion to $3.382 trillion.

The top five U.S. billionaires—Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett and Larry Ellison—saw their wealth grow by a total of $75.5 billion, or 19%. Together they captured 21% of the total wealth growth of all 600-plus billionaires in the last two months. The fortunes of Bezos and Zuckerberg together grew by nearly $60 billion, or 14% of the $434 billion total.

In March there were 614 billionaires on the Forbes list, and 630 two months later, including newcomer Kanye West at $1.3 billion.

During that same approximate period, more than 38 million working Americans lost their jobs, nearly 1.5 million Americans fell ill with the virus and more than 90,000 died from it.

Among other COVID-19 victims are the more than 16 million Americans who have likely lost employer-provided healthcare coverage. Low-wage workers, people of color and women have suffered disproportionately in the combined medical and economic crises. Billionaires are overwhelmingly white men.

Decades of tax cuts for the rich have fueled the growth of billionaires and their wealth. And even in the midst of the greatest national emergency since World War II, tax handouts to the wealthy have continued—most recently in the form of the “Millionaires Giveaway” slipped into the CARES pandemic relief law enacted in late March.

The recently passed House HEROES Act would repeal this tax break that is giving an average tax cut of $1.6 million this year to 43,000 millionaires and billionaires, according to the Joint Committee on Taxation. JCT estimates closing this loophole would raise $246 billion, which could be used for pandemic relief.

“The pandemic has revealed the deadly consequences of America’s yawning wealth gap, and billionaires are the glaring symbol of that economic inequality,” declared Frank Clemente, ATF’s executive director. “Jeff Bezos’ wealth shot up by $35 billion, or nearly one-third, the last two months.

That’s almost the $40 billion the CARES Act is spending on education programs. Mark Zuckerberg’s wealth grew by $25 billion, or by nearly half, the same amount the CARES Act is spending on improved SNAP food benefits.

The ‘Millionaires Giveaway’ should be immediately repealed and the $250 billion raised used to rescue struggling families and communities.”

Chuck Collins, director of the IPS Program

“The surge in billionaire wealth during a global pandemic underscores the grotesque nature of unequal sacrifice,” said Chuck Collins, director of the IPS Program on Inequality and co-author of the Billionaire Bonanza 2020 report. “While millions risk their lives and livelihoods as first responders and front line workers, these billionaires benefit from an economy and tax system that is wired to funnel wealth to the top.”

Sources: All data analyzed by ATF and IPS is from Forbes and available here. March 18, 2020, data is from the Forbes World’s Billionaires List: The Richest in 2020. May 19, 2020 data was taken from Forbes real-time estimates of worth that day.

Source: Americans For Tax Fairness

Note: We are seeking to Unite Africa with Infrastructure Projects

For the past ten years, Africa has recorded some of the world’s strongest rates of economic growth. At the same time, many African economies continue to function at well below their full potential. Structural transformation is needed to create more jobs, reduce poverty and accomplish sustainable development objectives.

The African Development Bank’s (www.AfDB.org) High 5 priority areas are intended to support African countries’ achievement of the SDGS. They are: Feed Africa; Light up Africa; Industrialise Africa; Integrate Africa; and Improve the Quality of Life for the people of Africa.

Atta Abdul, Fatima-Zahra, Shuaibu, and Daniel are the faces of a continent that is being transformed. By betting on Africa’s youth, the Bank is banking on the future to make the continent a land of progress, prosperity and hope.

Feed Africa

Since 2015, 74 million Africans have benefited from improved agricultural technologies through the Bank’s efforts to support increased food security on the continent.

In western Mauritania, for example, the Brakna-Ouest irrigation infrastructure improvement project, supported by the Bank in the amount of $12 million, enabled 1 500 farming and livestock-producing families to return to cultivating their fields.

“We come from a farming and livestock-producing family and we grew up in that environment. Our harvest was very poor. We wanted to move somewhere else,” explains Atta Abdul Seck, a project beneficiary in Louboudou in western Mauritania. “As a farmer’s son, what I liked most when I returned was being able to continue farming. Farming is in my blood,” he says proudly.

Light up Africa

Without electricity, agriculture cannot effectively meet the growing challenge of food security in Africa. The Bank has made investment in energy a priority. Since 2016, it has mobilised $12 billion for its “Light Up Africa” strategic priority. Through this investment, 13.4 million people have gained access to electricity.

Morocco has made significant progress in widening access to electricity. In just the past twenty years, the electricity system has expanded to cover almost the entire country. The national rural electrification program, supported by the Bank with 155 million euros, has connected nearly 12.8 million Moroccans to the national power grid.

In Dar El Aïn, a village twenty kilometres from Marrakesh, the arrival of electricity has opened new doors for the women of the “Al Amal” cooperative. They use electricity to process their wheat into couscous or create other barley or wheat-based products. “The cooperative processes local crops into added-value products. Now, with electricity, the women are much more efficient, and their products are of better quality. It creates hope,” says Fatima-Zahra, a thirty-year-old member.

Industrialise Africa

As part of the Bank’s “Industrialise Africa” priority, 9 million people have gained access to private financing. In Nigeria, for instance, where more than 70 percent of the population depends on agriculture, fluctuating harvests have significant repercussions on yields, income and food security.

One solution is fertilizer, particularly if locally produced. The Bank provided $100 million to support construction of a modern fertilizer plant in Port Harcourt.

Shuaibu Yusuf, a farmer in his thirties who live near Port Harcourt, has experienced the impact of this project in his daily life. “When I used this fertilizer, I saw the difference. My harvest increased by more than 40 percent. I can feed myself, pay for my children’s education, and even their medical expenses,” he says. “I’m going to encourage my children, my neighbours and members of my community to increase their farming activities so we can all progress together,” Shuaibu continues.

Integrate Africa

To derive more benefit from industrialisation, Africa must become better integrated in terms of trade and markets. Through integration, African countries can gain access to larger markets and thereby increase incomes for millions of residents through new opportunities.

Since 2015, 69 million people have benefited from the Bank’s support for new transport infrastructure that has advanced integration. Gaps in the primary transport corridors have been filled, links between countries have been strengthened, and intra-African trade has been revitalised.

A good example of this is The Nairobi-Addis-Ababa corridor, which received$670 million in Bank financing and which has enhanced the potential for trade and job growth in Ethiopia and Kenya.

Daniel Yatta, a forty-year-old Kenyan lorry driver, has been transporting goods between Nairobi and Addis-Ababa for 15 years, and has seen the new road’s impact on his business. “Back in the day, it would take more than two weeks to drive between Addis and Nairobi,” he says. The new road has made his life much easier. “With the new road, the trip takes only a few days. With 30 tonnes of freight, it only takes about 24 hours to drive to Addis!” he continues.

Improve the quality of life for the people of Africa

An important part of improving living conditions is providing better access to essential services such as health, water and sanitation. Since 2015, Bank-supported projects have given 43 million people access to water and sanitation.

Distributed by APO Group on behalf of African Development Bank Group (AfDB).

May 29, 2020 - An African Development Bank-supported water, sanitation and hygiene (WASH) program has proven life-altering in Ethiopia.

Just ask Masero Batebo, a blind resident from Jaatee Kebele in the country’s central Oromia region, who says he “cannot express its benefits in words.”

“Before the project, there were health problems…malaria, typhoid and different types of diseases,” he recalls.

Long queues for water and water-borne illnesses are concerns of the past for the more than 4.36 million people who have benefitted from the One WASH National Program, Ethiopia’s widespread response to a lack of water supply and hygiene facilities.

The program seeks to reach residents in rural and urban areas as well as schools and health centers, and to build capacity. More than 1 million rural pipe systems have been connected to the national water supply under its mandate.

The Ministry of Water, Irrigation and Electricity houses the program, with support from the Ministries of Health, Education and Finance. The government has taken a universal approach to filling the country’s water and sanitation gap by streaming all national and development projects through this over-arching program. As such, a single planning, reporting, budgeting and financial account has helped actors reduce the duplication of efforts and resources.

“When you are working and planning together, people know where to work and at what level to work,” explains Beshah Mogesse, Ethiopia’s Water Development Commissioner.

The African Development Fund and the Rural Water Supply and Sanitation Initiative together have financed $178 million of the program’s $465 million implementation cost in phase I.

The One WASH National Program set out to expand access to water and hygiene, increase girls’ school attendance and improve health in Ethiopia, and the benefits have extended well beyond those objectives.

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