The Federal Reserve Board has declared that the Bank Term Funding Program (BTFP) will discontinue making new loans on March 11, as originally planned. The program will still be active and making loans until that date, serving as an additional source of liquidity for qualified institutions.
The Bank Term Funding Program played a crucial role in preserving the stability of the banking system and providing support for the economy during a period of stress last spring. Following March 11, banks and other depository institutions will still have access to the discount window to fulfill their liquidity requirements.
As the program approaches its conclusion, the interest rate for new BTFP loans has been adjusted so that the rate for new loans extended from now until the program concludes will not be lower than the interest rate on reserve balances in effect on the day the loan is made. This interest rate modification guarantees that the BTFP will continue to serve its intended purpose in the current interest rate environment. This adjustment takes immediate effect, while all other terms of the program remain unchanged.
Established under Section 13(3) of the Federal Reserve Act with the approval of the Treasury Secretary, the BTFP has concluded its operations after fulfilling its goals. For any media inquiries, please contact [email protected] or call 202-452-2955.
