First Republic's Failure Shows the Limits of Fed Bank Programs
The Breakdown
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The Fed's Solution to Silicon Valley Bank and Signature Bank
The bank term funding program was the solution offered by the Fed as part of the resolution of Silicon Valley Bank and Signature Bank. It's meant to allow them to deal with their liquidity issues while actually holding those loans to maturity. The idea is that instead of these banks seeing significant consumer deposits having to sell their hold to maturity assets, they can just borrow the book value of the loan from the Fedinstead.
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