Fed offers $150 billion to banks via TAF

The minimum bid rate will be equivalent to the rate of interest that banks receive on excess reserve balances, which is currently 0.25%. This marks a change from the original arrangement, under which the minimum bid rate was determined by the average expected overnight federal funds rate over the term of the credit being auctioned.

The Fed created the TAF in December 2007 to provide short-term funds to banks affected by the lack of liquidity in funding markets. Under this program, the Fed auctions funds to banks against collateral that is accepted at the discount window.

See also: Fed to treble lending
TAF auctions hint at liquidity improvement

  • LinkedIn  
  • Save this article
  • Print this page  

You must be signed in to use this feature.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: