The FRED® Blog

Ensuring the liquidity of bank deposits

Data on the Bank Term Funding Program

Earlier this month, the Board of Governors of the Federal Reserve System announced it was making available additional funding to eligible depository institutions through a new Bank Term Funding Program. FRED quickly added four series with those data.

The program provides liquidity to US banks, saving associations, and credit unions to ensure those financial institutions have funding at hand to meet the needs of all their depositors. Borrowers pledge US Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. If needed, the Department of the Treasury would provide $25 billion as credit protection, or backstop, to the Fed.

The FRED graph above shows the dollar amount borrowed through that term program during its first two weeks of operation. The complete time series of data is contained on the FRED series page, which updates automatically whenever new data become available.

Now, this is called a term program because the lending window is finite and, specifically, is set to close on March 11, 2024. After that date, when the Federal Reserve Banks are paid back, the FRED series will stop updating and include the label “DISCONTINUED.”

The Fed establishes these term programs to alleviate short-term pressures in financial markets. One earlier example is described in this Economic Synopses essay by David Wheelock on the workings of the Term Auction Facility between December 2007 and February 2008.

How this graph was created: Search FRED for “Assets: Liquidity and Credit Facilities: Loans: Bank Term Funding Program, Net: Wednesday Level.”

Suggested by Diego Mendez-Carbajo.