NNA – The Federal Reserve has lent US banks nearly $12 billion under a new one-year lending program unveiled on Sunday, March 12, as authorities moved to ease stress on the financial system after Silicon Valley Bank's collapse. The total outstanding amount of all advances under the Bank Term Funding Program reached $11.9 billion by Wednesday, the US central bank announced in a statement on March 16.
The Fed had unveiled the plan alongside the Treasury and the Federal Deposit Insurance Corporation on Sunday night, as authorities looked to prevent other banks from running into the liquidity issues that ultimately doomed California's SVB. The new liquidity facility made additional funding available "to help assure banks have the ability to meet the needs of all their depositors," the statement read.
According to data made available Thursday, the Fed drew an additional $152 billion in short-term borrowing for banks from its standing loan window, the traditional liquidity backstop for lenders, a dramatic increase against the roughly $5 billion from the previous week.