End of Fed Tool That Buoyed US Banks Puts Reserves in Spotlight
- Bank Term Funding Program set to expire by end of Monday
- Liquidity in focus as central bank looks to wind down QT
Traffic passes the Marriner S. Eccles Federal Reserve building in Washington, D.
Photographer: Erin Scott/BloombergThis article is for subscribers only.
Wall Street banks are hunting for alternative ways to shore up their coffers as an emergency lending tool that helped resolve last year’s regional banking crisis expires.
The Bank Term Funding Program, which was established in March 2023 to restore confidence in the financial system after the collapse of Silicon Valley Bank, is set to stop doling out loans by Monday’s close. That’s reigniting the debate over whether the US financial system has the tools it needs to keep ample cash on hand.