The Federal Reserve Board said the Bank Term Funding Program will cease making new loans as scheduled on Monday, March 11. The program will continue to make loans until that date.
Rate Update: The Fed said the interest rate on new BTFP loans extended from now through the program’s expiration will be no lower than the interest rate on reserve balances in effect on the day the loan is made. This change is effective immediately, and all other terms of the program are unchanged.
Background: The Fed established the program in March 2023 following the failure of Silicon Valley Bank as an additional source of liquidity to support the stability of the banking system. The program offers loans of up to one year to eligible depository institutions pledging as collateral U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets.
Resources: Program resources available on the Fed’s Discount Window site include a term sheet, standard template email, collateral pledge instructions, and answers to FAQs.
