Fed’s Bank Term Funding Program (BTFP) Hits Record Level
BTFP was established by the Federal Reserve in March of this year in response to the banking crisis in the United States, which resulted in the collapse of Silicon Valley Bank and other depository firms.
The primary objective of the program is to provide support to banks and depository firms during times of crisis. Recent data released by the Federal Reserve Bank of St. Louis reveals that the BTFP has reached a record level of $103.08 billion in loans for the week ending June 28.
This represents the highest amount of distressed asset redemptions since the program’s inception three months ago. Despite the Federal Reserve’s efforts to assure investors that the banking crisis is under control, this significant milestone indicates that the Federal Reserve is still actively providing assistance to troubled banks.
Market analyst Joe Consorti has commented on these latest figures, suggesting that the BTFP’s presence in the market is supporting a willingness to take on higher risks across various sectors. This can be observed in the upward trend of stock markets such as the S&P 500.
Consorti believes that the BTFP may need to establish a new facility to purchase distressed commercial real estate loans and commercial mortgage-backed securities, indicating the potential expansion of the program’s scope to address challenges in these specific areas.
