Banks participating in the program can borrow up to the lesser of $500 million or 5% of total assets.
The banking industry in the United States has been facing a liquidity crisis in the wake of the COVID-19 pandemic. To address this issue, the Federal Reserve has established the "Broad-based Temporary Financing Program" (BTFP). The BTFP is a liquidity facility designed to give banks access to funds that can be used to meet their short-term liquidity needs.
The BTFP is open to all US banks with total consolidated assets of less than $700 billion. Banks participating in the program can borrow up to the lesser of $500 million or 5% of total assets. The duration of the program is until September 30, 2020.
The BTFP is designed to provide the banking industry with much-needed liquidity in times of economic distress. It is hoped that the program will result in increased confidence in the banking system and, in turn, greater stability in the overall financial system. The Federal Reserve, in conjunction with the Treasury Department, will be monitoring the effects of the program closely.
The introduction of the Broad-based Temporary Financing Program (BTFP) by the Federal Reserve is an attempt to address the liquidity crisis faced by US banks in the wake of the COVID-19 pandemic. The program is available until September 30, 2020 and is open to all US banks with total consolidated assets of less than $700 billion. Banks participating in the program can borrow up to the lesser of $500 million or 5% of total assets.
The Federal Reserve has stated that the goal of the BTFP is to provide banks with much-needed liquidity and to restore confidence in the banking system. To this end, the Federal Reserve and the Treasury Department will be closely monitoring the effects of the program. The success of the BTFP will be measured by its ability to provide stability to the broader financial system.