From Real Time Economics (New York Fed Unveils TSLF Terms):
The Federal Reserve Bank of New York announced the terms of its first Treasury swap auction set for March 27, indicating that it will offer $75 billion in government securities to the primary dealer banks and modifying the type of collateral it will accept in return.
The Term Securities Lending Facility, announced in early March, is an extension of an already existing facility at the New York Fed. Under the extended facility, primary dealers not only can offer a broader range of collateral against Treasury securities, they can also borrow for a longer term — 28 days versus overnight.
In total, the New York Fed has been authorized to lend up to $200 billion of Treasury securities through TSLF auctions. TSLF, the Fed’s latest tool to help revive strained financial markets, was created last week and will supply banks with scarce Treasury securities in exchange for less-liquid securities.
Market participants hope the new tool with help to ease conditions in strained securities repurchase markets and curb investors’ mad dash for cash. ...
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