LONDON (ShareCast) - (Sharecast News) - America's central bank unveiled a new lending facility to protect all uninsured deposits at US lenders.
According to US regulators, that meant that come Monday all of Silicon Valley Bank's and Signature Bank's depositors in the US would have access to their funds.

The Bank Term Funding Program would provide liquidity to lenders in exchange for collateral, which would be valued at par, eliminating in the process institutions' need to engage in potential fire sales of those same assets.

Those loans could be for maturities of up to a year while the collateral could include Treasuries, agency debt, mortgage-backed securities or other qualifying assets.

One senior Treasury official who briefed journalists reportedly said part of the logic behind the new facility had to do with the fact that other banks appeared to be in situations similar to those of SVB and Signature Bank.

Regulators were also careful to note that taxpayers would not foot the bill for any losses resulting from the two lenders' resolution, that was to say that the lenders had not been bailed out, further noting that their bondholders and shareholders had been wiped out.

An auction at the weekend to try and sell SVB appeared to falter because the US government had demured against backstopping any potential acquirer's losses from an acquisition.

In response to the news, S&P 500 mini futures were trading 41.25 points higher to 3,938.75.

The implied odds of a 50 basis point interest rate hike by the Federal Reserve at its 21-22 March meeting meanwhile were being put at just 17.4% by Fed funds futures.

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