The program was first instituted on December 17, 2007. These auctions allow their participants to obtain.

Understanding the Term Auction Facility (TAF)

The TAF was implemented with the express purpose of addressing "elevated pressures in short-term funding markets," according to a press release from the Federal Reserve System Board of Governors in 2007.

Participants bid for TAF funds through the reserve banks with a minimum bid set at an overnight indexed swap rate related to the maturity of the loans. These auctions allowed financial institutions to borrow funds at a rate that was below the discount rate.