What are the differences between the TSLF and other Federal Reserve operations, like the TAF and term repo operations?
The Term Auction Facility (TAF) offers term funding to depository institutions via a bi-weekly competitive auction. In contrast, the TSLF will offer Treasury GC to the New York Fed’s primary dealers in exchange for other program-eligible collateral. The New York Fed term repo operations are designed to temporarily add reserves to the banking system via term repos with the primary dealers. These agreements are cash-for-bond agreements and have an impact on the aggregate level of reserves available in the banking system. The security-for-security lending of the TSLF, however, will have no impact on reserve levels.
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