WASHINGTON--Some 1,804 depository institutions turned to the emergency lending facility set up last March in the wake of Silicon Valley Bank's collapse, representing about 20% of all eligible firms, the Federal Reserve said in a new report.
The Fed’s Financial Stability Report revealed that about 95% of the borrowers, which included banks, credit unions, savings associations, and branches and agencies of foreign banks, had less than $10 billion in assets.
“The Bank Term Funding Program, as it was called, was aimed at addressing a liquidity crunch after a run on deposits led to the failures of SVB and Signature Bank and forced financial authorities to stage a rescue of the sector,” noted Reuters in its analysis. “The facility lent on collateral without applying the usual haircuts and the loans were made on cheap terms.”
Set for Shut Down
As CUToday.info reported earlier, the program stopped making new loans on March 11, a year after its creation. At its peak it extended a total of $165 billion in loans, with terms of up to a year. It is expected to close down completely by March of 2025, according to the Fed.
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