Term Auction Facility
a.k.a. TAF
An emergency Fed programme from 2007 to 2010 that auctioned short-term loans to banks during the…
In plain English
An emergency Fed programme from 2007 to 2010 that auctioned short-term loans to banks during the financial crisis.
The Term Auction Facility (TAF) was launched by the Fed in December 2007, as banks stopped trusting each other and stopped lending. Banks could bid in auctions to borrow from the Fed for a few weeks or months, against collateral.
The point was to get cash to banks without the stigma of borrowing at the discount window, which could make a bank look desperate. It was wound down in 2010 as markets healed.
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