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Federal Reserve Board Chair Jerome Powell | Federal Reserve Board website

Federal Reserve Board’s Bank Term Funding Program winds down

The Bank Term Funding Program (BTFP), an initiative established by the Federal Reserve Board to fortify the banking system following the collapse of Silicon Valley Bank, will cease accepting new loans in March. However, it will continue to provide new loans until that time.

In a press release from the Federal Reserve Board, it was announced that the BTFP would stop issuing new loans on March 11. The conditions of the program remain consistent, except for a modification made to the interest rate on fresh loans.

"During a period of stress last spring, the Bank Term Funding Program helped assure the stability of the banking system and provide support for the economy," stated the Federal Reserve Board in a press release. "After March 11, banks and other depository institutions will continue to have ready access to the discount window to meet liquidity needs."

As per the board's final BTFP report to Congress on January 11, under this program which was authorized on March 12, 2023, funding was made available by the 12 Federal Reserve Banks to eligible depository institutions. This ensured that banks could satisfy their depositors' requirements. Loans were issued for up to one year using any collateral acceptable for purchase by these Federal Reserve Banks during open market operations; this included U.S. Treasuries, U.S. agency securities and U.S. agency mortgage-backed securities.

The report to Congress indicated that as of December 31, 2023, all loans provided under BTFP amounted to $129,178,287,000 in total outstanding value. The total worth of collateral used to secure these advances stood at $169,281,823,000.

According to its first program update delivered to Congress on March 16, 2023—four days after its launch—the total outstanding amount of advances under BTFP was $11,942,528,000 and the total value of collateral stood at $15,885,798,000.

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