US Fed announces $25B in funding to backstop banks

Read full article at News.

Hot on the heels of several United States bank collapses, the Federal Reserve Board has announced $25 billion worth of funding aimed at backstopping banks and other depository firms.

The funds would ensure that eligible banks would have enough liquidity to cover the needs of their customers during times of turmoil.

In a March 12 statement, the Federal Reserve said it created a $25 billion Bank Term Funding Program (BTFP) offering loans of up to one year to “banks, savings associations, credit unions, and other eligible depository institutions.”

Eligible firms must pledge U.S. Treasurys, agency debt and mortgage-backed securities or other “qualifying assets” as collateral, which will be valued “at par” — the price at which the assets were issued.

The Fed added it would be an “additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.”

It comes as Silicon Valley Bank (SVB) announced on March 8 a significant sale of assets and stocks aimed at raising additional capital, which panicked depositors and triggered a run on the bank. 

Related: US Fed announces $25B in funding to backstop banks

The bank run contaminated the crypto space as stablecoin issuer Circle disclosed it had $3.3 billion in SVB, causing further panic and resulting in its stablecoin USD Coin (USDC) losing its peg to the U.S. dollar.

It also comes on the same day that regulators closed New York-based Signature Bank, citing systemic risk. 

This is a developing story, and further information will be added as it becomes available.

This article is strictly for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. does not provide investment, tax, legal, business or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any loss or damage caused or alleged to be caused by, or in connection with, the use of or reliance on any content, goods, services or opinions mentioned in this article.

#Bitcoin #Crypto #Cryptocurrency

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