Bank Term Funding Program
The Bank Term Funding Program (BTFP) is an emergency lending program in the United States that was created by the Federal Reserve in March 2023.[1] The program is designed to safeguard institutions, following the collapse of Silicon Valley Bank and other bank failures.[2] Funded through the Deposit Insurance Fund,[3] the program offers loans of up to one year to eligible borrowers who pledge as collateral certain types of securities including U.S. Treasuries, agency debt, and mortgage-backed securities.[4] The collateral will be valued at par instead of open-market value, so a bank can borrow on asset values that have not been impaired by a series of interest rate hikes since 2022. The Department of the Treasury will make available up to $25 billion from its Exchange Stabilization Fund as a backstop for the program.[5]
References
- ^ Eisen, Ben (March 12, 2023). "Meet the BTFP, the Fed's 2023 Crisis Facility". The Wall Street Journal. Retrieved March 12, 2023.
- ^ Cox, Jeff (March 12, 2023). "U.S. government steps in and says people with funds deposited at SVB will be able to access their money". CNBC. Retrieved March 12, 2023.
- ^ Smialek, Jeanna; Rappeport, Alan (March 12, 2023). "Regulators Race to Contain Silicon Valley Bank Fallout and Close Signature Bank". The New York Times. Retrieved March 12, 2023.
- ^ Smith, Colby; Politi, James; Fontanella-Khan, James; Masters, Brooke (March 12, 2023). "Federal Reserve announces emergency lending facility to shore up US banks". Financial Times.
- ^ Burns, Dan (March 12, 2023). "Factbox: Key elements of Fed's new US bank funding program". Reuters.
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