Circular
Federal Reserve Authorizes Small-Value Offerings of Term Deposits under Term Deposit Facility
May 11, 2010
Circular No. 12208

The Federal Reserve Board has authorized up to five small-value offerings of term deposits under the Term Deposit Facility (TDF) to be conducted in coming months.

These small-value offerings are designed to ensure the effectiveness of TDF operations and to provide eligible institutions with an opportunity to gain familiarity with term deposit procedures. The development of the TDF and the small-value TDF offerings are a matter of prudent planning and have no implication for the near-term conduct of monetary policy.

The Board also approved a basic structure for the small-value TDF offerings. Similar to many money market instruments, the term deposits offered will be simple fixed-rate instruments with maturities of 84 days or less and will be issued primarily through competitive single-price auctions. TDF offerings will also include a noncompetitive bidding option to ensure access to term deposits for smaller institutions.

The first small-value TDF offering could be held as early as mid-June. More information about the timing and other details of these small-value TDF offerings will be announced at a later date.

See press release for full details.

Press release offsite