In 2023, the Federal Reserve established the Bank Term Funding Program (BTFP) as a response to the failures and issues of Silicon Valley Bank and Signature Bank. The BTFP aims to provide liquidity to U.S. depository institutions and to assure depositors that banks have the ability to meet their needs. A key difference between the BTFP and other options currently available to banks is that the assets they post as collateral at book value and note the current market value, so long as the asset was acquired prior to March 12, 2023, which has provided much needed calm to the markets ever since.
