You may recall that last year, the American economy, which was already teetering on the brink of a significant setback, survived the collapse of four banks within a few short weeks of each other. The Bank Term Funding Program (BTFP) was widely credited with stopping the bleeding.
Unfortunately, that program ends this week.
If you’re not familiar with it, the program was an emergency lending program created by the Federal Reserve last March that provided emergency liquidity to US banks. The program was established in response to the failures of Signature Bank and Silicon Valley Bank, the largest such collapses since the 2008 financial meltdown. The program provided loans lasting up to one year “to eligible borrowers pledging collateral eligible for purchase by Federal Reserve Banks in open market operations,” the WLT report wrote.
The program is scheduled to sunset on March 11. The Fed has already announced the program will cease making new loans as scheduled.
