The TALF Catalyst?
By Erica Berg and Kevin Petrasic
In the latest credit easing move by the Federal Reserve Board (FRB), the FRB last week opened the door to stimulation of consumer spending by attempting to jump start the frozen securitization markets. On March 3, 2009, the FRB and U.S. Treasury Department (Treasury) launched the first phase of the much anticipated Term Asset-Backed Securities Loan Facility (TALF), a program under the Feds Consumer and Business Lending Initiative. The details regarding TALF have been highly anticipated since the Feds initial announcement regarding TALF in November 2008. While terms and conditions have now been released for TALFs initial phase, questions remain regarding whether TALF will serve as the catalyst that the FRB and Treasury are looking for to thaw the consumer lending (and commercial) securitization markets.