Fed to end credit program created after Silicon Valley Bank collapse

In a statement released by the U.S. Federal Reserve (Fed), it was announced that the Bank Term Funding Program (BTFP) will stop issuing new loans.

The statement noted that the program will conclude as planned on March 11, and that loans will continue to be provided under the program until that date.

The statement recalled that the program helped ensure the stability of the banking system and supported the economy last year.

The Fed's statement indicated that after the specified date, banks and other depository institutions will continue to have access to the discount window to meet their liquidity needs.

In the U.S., several major banks reached the point of collapse last March as a result of significant losses stemming from risky loans.

The collapse of Silicon Valley Bank, which was the 16th largest bank in the U.S. with total assets of 209 billion dollars, on March 10 was followed by difficulties experienced by Signature Bank and First Republic Bank.

The bank failures, which occurred during a period of continued interest rate hikes in the face of high inflation and rising recession expectations, had increased concerns in global markets.

Following these bankruptcies, the Fed launched the Bank Term Funding Program (BTFP) on March 12 to facilitate lending to eligible depository institutions.

News Source: AA