86 The Federal Reserve has decided to terminate the Bank Term Funding Program (BTFP) on March 11, a year after its initiation in response to regional bank failures. While the BTFP will cease issuing new loans, existing loans will continue until the program’s closure. Banks will maintain access to the discount window to address liquidity needs. To align with current interest rate conditions, the interest rate on new BTFP loans will be adjusted to match the rate on reserve balances at the time of loan issuance. This modification aims to ensure continued program support in the prevailing interest rate environment. Established under Section 13(3) of the Federal Reserve Act with Treasury Secretary approval, the BTFP provided additional funding to eligible depository institutions, supporting American businesses and households. Loans of up to one year were offered against high-quality collateral, serving as a liquidity source during stressful periods without the need for rapid asset sales. While the termination of the BTFP may not immediately impact the market, it underscores potential challenges ahead and highlights the importance of alternative liquidity channels like the discount window. You Might Be Interested In Unveiling ON Semiconductor’s Market Perspective: A Deep Dive into Analyst Ratings Reliance Finalizes Acquisition of American Alloy Steel MC13 success critical to the liberal trading order Chinese travelers are coming, says Banyan Tree founder Ho Kwon Ping WeWork’s Chapter 11 Bankruptcy Plan Approved: Debt Elimination and Equity Transfer Bank of England Maintains 5.25% Interest Rate Amidst Inflation Concerns