If A Bank Fails | Bridger Pennington with Joe Brown

The BTFP is pretty much permanent now. There's a new facility the Fed set up, the Bank Term Funding Program. So if a bank is in trouble, before this, they'd have to sell all their debt at, you know, a way lower price than what they bought it at, take the loss, pay back what they could, and they go under. They can use this new BTFP to temporarily sell it to the Fed, you know, big, you know, corporate, you know, pawn shop basically. They temporarily sell it to the Fed with the promise of buying it back later, but they get to sell it at that full price. what they bought it at. So they don't have to take a loss on it. So that's what the Fed set up for banks.

Wow. Hold on. Just to— thanks for shedding light on this. Are they selling back their bond assets to the Fed or any assets they can sell to the Fed?

It's Treasuries, basically.

The Fed is saying, we'll buy back your Treasuries at whatever cost you bought them at.