TechFlow news — The Federal Reserve announced that, with the approval of the Treasury Secretary, the U.S. Department of the Treasury will allocate $25 billion from the Exchange Stabilization Fund to provide emergency lending support. A new funding program will be established through the creation of a Bank Term Funding Program (BTFP), offering loans of up to one year to banks, savings associations, credit unions, and other eligible depository institutions. These loans will be collateralized by U.S. Treasuries, agency debt, mortgage-backed securities, and other qualifying assets. The collateral will be valued at par. The BTFP will serve as an additional source of liquidity for high-quality securities, eliminating the need for institutions to rapidly sell such securities during periods of stress.
Additionally, Signature Bank has been closed, and the New York State Department of Financial Services has taken over Signature Bank. All depositors of Silicon Valley Bank and Signature Bank will be fully protected, but shareholders and certain unsecured debt holders will not be protected. The New York State Department of Financial Services stated that it is working closely with other regulatory agencies.Source link
