Term Funding Scheme
The Term Funding Scheme (TFS) was launched in 2016, and provided funding to banks and building societies at rates close to Bank Rate. The TFS was open to drawdowns from 19 September 2016 to 28 February 2018. It was designed to encourage banks and building societies to reflect cuts in Bank Rate in the interest rates faced by households and businesses. It also encouraged them to lend by providing a cost-effective source of funding. It was launched by the Monetary Policy Committee as monetary policy tool.
The TFS allowed firms to borrow central bank reserves in exchange for eligible collateral. It was open to firms that were members of the Sterling Monetary Framework and signed up to our Discount Window Facility.
When it was launched, the TFS was operated as part of the Asset Purchase Facility (APF). However, as part of our new capital framework, in January 2019 all TFS drawings, and the collateral backing them, were transferred from the APF to the Bank of England's balance sheet.
As a result of this, TFS drawings now appear on the Bank of England Weekly Report.