Journal Article

TALF: Jump-starting the securitization markets

Abstract: In the financial crisis that began in August 2007, securitization activity virtually dried up. When the housing bubble burst, the value of the collateral backing much of the asset-backed securities (ABS) declined sharply, and so did the value of the securities themselves. The Federal Reserve responded by creating the term asset-backed securities loan facility, or TALF. Its 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.

Keywords: Asset-backed financing; Securities; Federal Reserve System; Financial crises;

Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Economic Letter

Publication Date: 2009

Volume: 4

Order Number: 6