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 Term Asset-Backed Securities Loan Facility

This chart shows the short-term wholesale funding as a percent of assets for the 4 largest U.S. banks.  

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Program Purpose and Overview

The Term Asset-Backed Securities Loan Facility (TALF) is a joint Federal Reserve-Treasury program that was designed to restart the asset-backed securitization markets (ABS) that had ground to a virtual standstill during the early months of the financial crisis.

 

The ABS markets historically have helped to fund a substantial share of credit to consumers and businesses. The consequences of these markets coming to a standstill were many: limited availability of credit to households and businesses of all sizes, an unprecedented widening of interest rate spreads, sharply contracting liquidity in the capital markets and a potential to further weaken U.S. economic activity.

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Key Facts

  • TALF is a joint program between Treasury and the Federal Reserve designed to restart the asset‐backed securitization markets that provide credit to consumers and small businesses.
  • TALF’s goal was to support the consumer and business credit markets by providing financing to private investors to help unfreeze and lower interest rates for auto loans, student loans, small business loans, credit cards, and other consumer and business credit.
  • The program closed to new lending on June 30, 2010. Treasury has collected more than $590 million in contingent interest proceeds and other gains from the program which had an initial investment of $100 million. 

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Last Updated: 3/10/2014 4:12 PM