Ackman warns of financial contagion caused by FRB support.

Hedge fund manager Bill Ackman has criticized the recycling of deposits from First Republic Bank (FRB) back into the struggling lender, saying it spreads the risk of financial contagion to achieve a false sense of confidence in FRB. Ackman called for a temporary deposit guarantee until an expanded government insurance scheme is widely available. Meanwhile, the Federal Reserve is having to expand its balance sheet again after banks used its new Bank Term Funding Program to borrow $11.9bn. The stock market rallied on Thursday, but some are worried that recent actions to help the banking sector are not just papering over the cracks but possibly making things worse.