[Rusty0604]

“The banks would hold a buffer of liquid assets - such as government bonds - to draw on to ensure they can meet withdrawals by depositors, to post collateral due to credit rating downgrades and to meet other needs.”

Sounds like they need more gov’t bondholders.

[Darteaus94025]

"Sounds like they need more gov’t bondholders"

Exactly right! This is the government taking your money: you deposit cash, and they-through the bank-give you a "promise". Yes, I know that currency is also a "promise", but try to spend a government bond and you will see my point.

All broke countries turn to confiscating money from their citizens bank deposits, retirement accounts, etc. Google recent history of the Cyprus bank "bailout" and Poland's confiscation of 50% of retirement savings.

[Son House]

Could it be a replacement for the quantitative easing;

This could be the largest Fed stimulus yet
http://www.freerepublic.com/focus/f-news/3084498/posts

Given this environment and the leadership transition as Ben Bernanke’s term ends in January, the Fed will likely continue its current stimulus program at full blast — buying $85 billion in bonds each month — until at least March 2014.

That means QE3 could total around $1.6 trillion, calculates Paul Ashworth of Capital Economics. That’s more than either of its two predecessors. In contrast, QE1 totaled $1.5 trillion and the second round of stimulus added up to about $600 billion.