Federal Reserve: The Treasury will provide $25 billion in emergency loan support, Signature Bank has been closed
ChainCatcher news, the Federal Reserve announced that, with the approval of the Treasury Secretary, the Treasury will allocate $25 billion from the Exchange Stabilization Fund as emergency loan support. The new financing plan will be provided through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year to banks, savings associations, credit unions, and other eligible deposit institutions, secured by U.S. Treasuries, agency debt, mortgage-backed securities, and other qualifying assets. These assets will be valued at par, and the BTFP will serve as an additional source of liquidity for high-quality securities, eliminating the need for institutions to quickly sell these securities during times of stress.Additionally, Signature Bank has been closed, and the New York Department of Financial Services has taken over Signature Bank. All depositors of Silicon Valley Bank and Signature Bank will be fully protected, but shareholders and certain unsecured bondholders will not be protected. The New York Department of Financial Services stated that they are working closely with other regulatory agencies. (source link)