What does TAF mean in ACCOUNTING
The Term Auction Facility (TAF) is a tool used by the Federal Reserve to provide liquidity to depository institutions. The primary goal of the TAF is to ensure that banks and other financial institutions have access to liquid funds at reasonable market rates.
TAF meaning in Accounting in Business
TAF mostly used in an acronym Accounting in Category Business that means Term Auction Facility
Shorthand: TAF,
Full Form: Term Auction Facility
For more information of "Term Auction Facility", see the section below.
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Essential Questions and Answers on Term Auction Facility in "BUSINESS»ACCOUNTING"
What is the Term Auction Facility?
The Term Auction Facility, or TAF, is a program established by the Federal Reserve in December 2007 during the subprime mortgage crisis and subsequent economic recession. It allows eligible depository institutions to obtain short-term loans in a series of periodic auctions with maturities ranging from 28 days to 84 days.
How does the Term Auction Facility work?
Under this program, financial institutions can bid on these short-term loans at an auction held twice per month. At each auction, different types of collateral are accepted by the Fed as security for the loan amount. The bank with the highest warranted bid rate receives all of its requested funds; other bidders receive only a portion or none at all depending on availability.
What are the benefits of using the Term Auction Facility?
TAF helps to ensure that banks and other financial institutions have access to liquid funds at reasonable market rates. In addition, it creates competition among lenders and promotes liquidity in money markets without distorting yields in longer-term markets.
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