The Federal Reserve Board’s Bank Term Fund Program (BTFP) – the emergency lending facility set up last year during the March banking crisis – will stop making new loans on March 11. Until then, banks and other depository institutions will still be able to borrow from the facility, albeit at a slightly higher interest rate.
Notably, banks will be able to refinance their borrowing until March 10, which will provide liquidity for another year.
Separately, the Federal Reserve is actively encouraging banks to sign up for the fed discount window and to familiarize themselves with the facility. Last summer, federal regulators reiterated that the discount window should be part of an array of funding sources upon which banks rely, including private lenders such as the Federal Home Loan Banks.
IBAT will continue to provide updates on the Federal Reserve’s effort to ensure access to liquidity for community banks.