Editing Federal Reserve (section)

==== Term auction facility ====
{{Further|Term auction facility}}

The Term auction Facility was a program in which the Federal Reserve auctioned term funds to depository institutions.<ref name="taffaq">{{Cite web |date=January 12, 2009 |title=FRB: Temporary Auction Facility FAQ |url=http://www.federalreserve.gov/monetarypolicy/taffaq.htm |access-date=August 29, 2011 |publisher=Federalreserve.gov}}</ref> The creation of this facility was announced by the Federal Reserve on December 12, 2007, and was done in conjunction with the [[Bank of Canada]], the [[Bank of England]], the [[European Central Bank]], and the [[Swiss National Bank]] to address elevated pressures in short-term funding markets.<ref name="taf">{{Cite news |date=December 12, 2007 |title=Announcement of the creation of the Term Auction Facility – FRB: Press Release – Federal Reserve and other central banks announce measures designed to address elevated pressures in short-term funding markets |publisher=federalreserve.gov |url=http://www.federalreserve.gov/newsevents/press/monetary/20071212a.htm}}</ref> The reason it was created was that banks were not lending funds to one another and banks in need of funds were refusing to go to the discount window. Banks were not lending money to each other because there was a fear that the loans would not be paid back. Banks refused to go to the discount window because it was usually associated with the stigma of bank failure.<ref>{{Cite news |date=February 18, 2008 |title=US banks borrow $50bn via new Fed facility |work=Financial Times |url=http://www.ft.com/cms/s/66db756a-de5d-11dc-9de3-0000779fd2ac.html |archive-url=https://ghostarchive.org/archive/20221210/http://www.ft.com/cms/s/66db756a-de5d-11dc-9de3-0000779fd2ac.html |archive-date=December 10, 2022 |url-access=subscription |quote=Before its introduction, banks either had to raise money in the open market or use the so-called "discount window" for emergencies. However, last year many banks refused to use the discount window, even though they found it hard to raise funds in the market, because it was associated with the stigma of bank failure}}</ref><ref>{{Cite news |date=January 4, 2008 |title=Fed Boosts Next Two Special Auctions to $30 Billion |publisher=Bloomberg |url=https://www.bloomberg.com/apps/news?pid=20601103&refer=news&sid=aBPbErlft9cI |quote=The Board of Governors of the Federal Reserve System established the temporary Term Auction Facility, dubbed TAF, in December to provide cash after interest-rate cuts failed to break banks' reluctance to lend amid concern about losses related to subprime mortgage securities. The program will make funding from the Fed available beyond the 20 authorized primary dealers that trade with the central bank}}</ref><ref>{{Cite news |date=December 13, 2007 |title=A dirty job, but someone has to do it |work=economist.com |url=http://www.economist.com/displaystory.cfm?story_id=10286586 |access-date=August 29, 2011 |quote=The Fed's discount window, for instance, through which it lends direct to banks, has barely been approached, despite the soaring spreads in the interbank market. The quarter-point cuts in its federal funds rate and discount rate on December 11 were followed by a steep sell-off in the stockmarket...The hope is that by extending the maturity of central-bank money, broadening the range of collateral against which banks can borrow and shifting from direct lending to an auction, the central bankers will bring down spreads in the one- and three-month [[money market]]s. There will be no net addition of liquidity. What the central bankers add at longer-term maturities, they will take out in the overnight market. But there are risks. The first is that, for all the fanfare, the central banks' plan will make little difference. After all, it does nothing to remove the fundamental reason why investors are worried about lending to banks. This is the uncertainty about potential losses from subprime mortgages and the products based on them, and – given that uncertainty – the banks' own desire to hoard capital against the chance that they will have to strengthen their balance sheets.}}</ref><ref>{{Cite news |date=December 13, 2007 |title=Unclogging the system |work=economist.com |url=http://www.economist.com/daily/news/displaystory.cfm?story_id=10278482&top_story=1 |access-date=August 29, 2011}}</ref> Under the Term auction Facility, the identity of the banks in need of funds was protected in order to avoid the stigma of bank failure.<ref name="mwtaf">{{Cite web |last=Robb |first=Greg |date=December 12, 2007 |title=Fed, top central banks to flood markets with cash |url=http://www.marketwatch.com/news/story/fed-top-central-banks-flood/story.aspx?guid=%7b6FAFC482-F8E4-4F23-A021-52DC7DE8938C%7d&print=true&dist=printTop |access-date=August 29, 2011 |publisher=Marketwatch.com}}</ref> [[Central bank liquidity swap|Foreign exchange swap lines]] with the [[European Central Bank]] and [[Swiss National Bank]] were opened so the banks in Europe could have access to [[U.S. dollar]]s.<ref name="mwtaf"/> The final Term Auction Facility auction was carried out on March 8, 2010.<ref>{{cite web |title=Federal Reserve Board – Term Auction Facility |url=https://www.federalreserve.gov/monetarypolicy/taf.htm |website=Board of Governors of the Federal Reserve System |access-date=August 11, 2023 |language=en |date=November 24, 2015}}</ref>