The US created a billion-dollar fund to finance banks after the collapse of SVB

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The US Federal Reserve will provide additional funding to help the banking system function after the collapse of Silicon Valley Bank and Signature Bank.

Reported about it press service Fed Reserve.

“This step will strengthen the banking system’s ability to protect deposits and ensure the continuous supply of money and credit to the economy,” the Fed said in a statement.

In order to provide additional liquidity to banks, a new Bank Term Funding Program (BTFP) will be created, which will offer loans with a term of up to one year to banks, pension funds, credit unions and other institutions secured by US Treasuries, agency debt, etc. These assets will be valued at face value.

The Fed believes that the program will provide an additional source of liquidity against the collateral of high-quality securities, which will relieve the institution of the need to quickly sell these securities during volatile periods.

To support the financing of the program, the US Treasury Department plans to allocate up to 25 billion dollars from the Exchange Stabilization Fund. At the same time, the Federal Reserve does not expect that there will be a need to use these additional funds.

Read more: The world is panicking over the collapse of Silicon Valley Bank and fears a new financial crisis. Is everything so serious?

We remind you:

The Federal Deposit Insurance Corporation and the Federal Reserve are considering the possibility creation of a fund, which would have allowed regulators to keep more deposits in troubled banks after the collapse of Silicon Valley Bank.

Silicon Valley Bank pond the largest U.S. bankruptcy in a decade, after its longtime customer base of tech startups became concerned and began withdrawing deposits.

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