The Federal Reserve announces that the Bank Term Funding Program will end as scheduled

Podcast

The Federal Reserve announces that the Bank Term Funding Program will end as scheduled

Episode Summary

The Federal Reserve announced that the BTFP will come to a close. A reminder of what the BTFP was, and why it was initiated.

As described in our podcast in [July], the BTFP was used. Some indications of levels.
Would describe the part of the release that describes the changes in the rates, but in a just-the-facts way.
The decision to close the facility might be motivated by the fact that unusual and exigent circumstances no longer obtain that would merit re-authorization.
The sector appears healthier than during the brief period of turmoil last year, and financial markets and the economy are in good shape.
Presumably, the Fed judged that the facility was no longer needed, and that banks had adequate sources of funding.
And, the BTFP could be part of the Fed’s toolkit going forward for emergencies. Compare how some of the facilities from 2008 got rolled out in in 2020
Cite to various regulators statements that banks should have collateral pledged and test their readiness.

In this episode

James Bergin, Partner, Arnold & Porter
Warren Hrung, SVP, Head of Banking and Financial Services Research, American Bankers Association

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The Federal Reserve announces that the Bank Term Funding Program will end as scheduled