The FDIC voted on Tuesday to end the Temporary Liquidity Guarantee Program that is being used to guarantee certain debt issued by some of the nation’s largest banks, but also setup a 6-month safety net facility as part of the process. All five members of the FDIC’s panel of regulators voted to end the program as scheduled on October 31st.
New debt can be issued and guaranteed under the program up until the deadline. The deadline on the newly placed debt would expire no later than December 31st, 2012.
FDIC Chairman, Sheila Bair, stated, “It should be clear that this is not a continuation of the program but an ending of the program.”
The program does leave open a 6-month safety-net feature for banks suffering from “market disruptions” beyond their control. Under the transitional facility, banks can have new debt guaranteed through April 30th, 2010 if the FDIC approves the guarantee.
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