Term Securities Lending Facility

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Term Securities Lending Facility


Seal	The Federal Reserve System Eccles Building (Headquarters)

Headquarters

Central Bank of

ISO 4217 Code

USD

Base borrowing rate

2.25%

Base deposit rate

3.5%

Website

federalreserve.gov

The Federal Reserve has a Term Securities Lending Facility (TSLF). The TSLF is a weekly loan facility that promotes liquidity in Treasury and other collateral markets and thus fosters the functioning of financial markets more generally. The program offers Treasury securities held by the System Open Market Account (SOMA) for loan over a one-month term against other program-eligible general collateral. Securities loans are awarded to primary dealers based on a competitive single-price auction.

[edit] History

In 2008, as liquidity in the global markets came to a halt, the FED took action to allow the TSLF to expand the types of acceptable collateral: student loans, car loans, home equity loans and credit card debt, as long as it was highly rated [1]. Ironically, many of the establishment rating firms were themselves shown to be of little worth in the preceding few years, and the ratings system was in the state of being reworked.