Crypto News

US Fed announces $25B in funding to backstop banks

US Fed announces $25B in funding to backstop banks
© Copyright Image: Crypto Breaking News

Hot on the heels of several United States bank collapses, the Federal Reserve Board has announced $25 billion worth of funding aimed at backstopping banks and other depository firms.

The funds would ensure that eligible banks would have enough liquidity to cover the needs of their customers during times of turmoil.

In a March 12 statement, the Federal Reserve said it created a $25 billion Bank Term Funding Program (BTFP) offering loans of up to one year to “banks, savings associations, credit unions, and other eligible depository institutions.”

Eligible firms must pledge U.S. Treasurys, agency debt and mortgage-backed securities or other “qualifying assets” as collateral, which will be valued “at par” — the price at which the assets were issued.

The Fed added it would be an “additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.”

It comes as Silicon Valley Bank (SVB) announced on March 8 a significant sale of assets and stocks aimed at raising additional capital, which panicked depositors and triggered a run on the bank. 

Related: US Fed announces $25B in funding to backstop banks

The bank run contaminated the crypto space as stablecoin issuer Circle disclosed it had $3.3 billion in SVB, causing further panic and resulting in its stablecoin USD Coin (USDC) losing its peg to the U.S. dollar.

It also comes on the same day that regulators closed New York-based Signature Bank, citing systemic risk. 

This is a developing story, and further information will be added as it becomes available.

Source: Cointelegraph.com

The post US Fed announces $25B in funding to backstop banks appeared first on Crypto Breaking News.

Read more: https://www.cryptobreaking.com/us-fed-announces-25b-in-funding-to-backstop-banks/

Text source: Crypto Breaking News

Disclaimer: Financial information and news are not financial advice, read the disclaimer.
Buy & sell Crypto in minutes

Join BINANCE!

The world's largest crypto exchange

You're just steps away from receiving your reward.

The most complete Crypto News Center.

Search Stories:

Latest top stories