DEFINITION of 'Cash for Bond Lending'

A lending structure used in the Federal Reserve's Term Auction Facility (TAF), whereby borrowers receive a cash loan, by using all or a portion of their own portfolio of bonds as collateral.

BREAKING DOWN 'Cash for Bond Lending'

The cash for bond lending structure is not to be confused with the bond for bond lending structure, in which the borrower takes bonds instead of cash.

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