Bank Term Funding Program
BankingDefinition
Emergency Fed facility created March 2023 in response to the SVB collapse. Lent banks par value (not market value) on Treasuries and MBS as collateral, removing the unrealized-loss problem that took down SVB.
Essentially gave banks a free option (deposit Treasuries with the Fed at par, get back what they originally paid). Wound down March 2024 after the regional banking crisis stabilized.
Essentially gave banks a free option (deposit Treasuries with the Fed at par, get back what they originally paid). Wound down March 2024 after the regional banking crisis stabilized.