•  
• Tweet
•  
•        Print
•  
•         Track Keywords
•  
• 

From the Opalesque team:

In newly released research by the Federal Reserve Bank of Dallas, research officer Kenneth J Robinson looks at the ways term asset-backed securities loan facility (TALF) was designed to and in some cases, re-worked to try and jump-start the securitization.

TALF was the designed after the market shut down in 2008 and the Fed response of lowering federal funds rates and increasing discount window lending did not successfully end the financial crisis. Amongst the new policy creations, TALF was created in November of that year and as it's scope has grown to have the potential to reach $1tln it has become one of the Fed's largest programs.

"[TALF's] purpose is to boost securitization by providing loans to people holding certain highly rated ABS. These loans will then support new ABS issues and help thaw out the securitization markets. Judging from both new issues and spreads in secondary markets, the TALF appears to be meeting its objective of jump-starting the securitization markets," says the report.

Initially, collateral eligible for TALF loans included ABS backed by automobile, credit card and student loans along with SBA guaranteed small business loans.

The report shows that student loan ABS markets began to return in February and credit card ABS followed in March. The ABS markets as a whole began to recover with the exception of the commercial mortgage backed securities (CMBS) markets that stayed weak through ......................

To view our full article Click here