Kind of like Repo's, but the Repo's are of US Governement bonds from primary dealers to add liquidity to the balance sheets of the primary dealers in US Government Debt.
These are term loans, the first auction is for a 28 day loan and the second loan period is 35 days. The first TAF auction of $20 billion is scheduled for Monday, December 17, with settlement on Thursday, December 20; this auction will provide 28-day term funds, maturing Thursday, January 17, 2008. The second auction of up to $20 billion is scheduled for Thursday, December 20, with settlement on Thursday, December 27; this auction will provide 35-day funds, maturing Thursday, January 31, 2008.
My editorial slant: Bank's can submit there more opaque collateral and use it to Borrow State of the art, Freshly created Central Bank (money) liquidity, USD's, dead presidents..... electronic credits to their account..... manna from heaven... that with which pipe dreams are funded... whichever euphemism one feels most comfortable with.
And then the banks get these sterling CDO's and other exotic securitization products back, very hopefully to resubmit to the TAF, a few days later at the next auction to get back that high octane Central Bank credit.
John
Straight from the frontlines of 21st Century Central Banking...... |
