Fed Provides FAQs on Bank Term Funding Program

Posted: Mar 15 2023

The Federal Reserve has released a set of FAQs providing details on its newly announced Bank Term Funding Program to provide a liquidity backstop to eligible depository institutions. The backstop is designed to prevent banks from having to sell Treasurys, agency mortgage-backed securities and other qualifying assets during times of stress by lending for up to one year at par with the securities as collateral. The program launched on Sunday, March 12.

The 26 FAQs cover the design of the program, including how it differs from the discount window; program eligibility and documentation; what collateral is eligible; and rates, fees, maturities and other mechanics of the program, among other details.

To view the FAQs, visit: https://www.federalreserve.gov/monetarypolicy/files/bank-term-funding-program-faqs.pdf