Temporary Liquidity Guarantee Program (TLGP)

AAA

DEFINITION of 'Temporary Liquidity Guarantee Program (TLGP)'

The TGLP was instituted in 2008 by the FDIC during the worldwide banking crisis. The TGLP was one of many government interventions that resulted from the determination by the U.S. Treasury and Federal Reserve that the severe systemic risk warranted unprecedented action. Under the program, the FDIC increased its insurance coverage for depository accounts held at certain financial institutions, and also leant its guarantee to certain unsecured credit obligations of those institutions, most notably certificates of deposit and commercial paper. These two separate programs were known as the Transaction Account Guarantee Program and the Debt Guarantee Program

INVESTOPEDIA EXPLAINS 'Temporary Liquidity Guarantee Program (TLGP)'

The TGLP was conceived to avert the two most immediate threats to the U.S. financial system. The first was the confidence of the public in the integrity ot their depositary institutions. The second threat was the disintegration in the interbank and short-term credit markets causing such a liquidity crisis that several major institutions went bankrupt.

RELATED TERMS
  1. Subprime Meltdown

    The sharp increase in high-risk mortgages that went into default ...
  2. Liquidity Crisis

    A negative financial situation characterized by a lack of cash ...
  3. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  4. Interbank Rate

    The rate of interest charged on short-term loans made between ...
  5. Liquidity

    1. The degree to which an asset or security can be bought or ...
  6. Troubled Asset Relief Program - ...

    A government program created for the establishment and management ...
RELATED FAQS
  1. What average annual growth rate is typical for the banking sector?

    The banking sector plays an important intermediary role by channeling available funds for productive uses in the economy ... Read Full Answer >>
  2. How does neoclassical economics relate to neoliberalism?

    While it may be likely that many neoliberal thinkers endorse the use of (or even emphasize) neoclassical economics, the two ... Read Full Answer >>
  3. What regulations exist to protect infant industries?

    There are far more protections of once-infant and now-dominant industries in the United States than regulations designed ... Read Full Answer >>
  4. What are the main risks to the economy of a country that has implemented a policy ...

    The main risk to the economy of a country that has implemented a policy of austerity is the potential for a self-reinforcing, ... Read Full Answer >>
  5. How does protectionism affect gross domestic product (GDP?)

    The vast majority of economic literature suggests that protectionist policies reduce the gross domestic product, or GDP, ... Read Full Answer >>
  6. What are the major laws (acts) regulating financial institutions that were created ...

    Presidents George W. Bush and Barack Obama, in conjunction with Congress, signed into law several major legislative responses ... Read Full Answer >>
Related Articles
  1. Retirement

    The History Of The FDIC

    Find out why this corporation was developed and how it protects depositors from bank failure.
  2. Options & Futures

    Bank Failure: Will Your Assets Be Protected?

    The SIPC and FDIC insure against personal financial ruin when banks or brokerages go belly up.
  3. Options & Futures

    Financial Regulators: Who They Are And What They Do

    Find out how these government agencies govern the financial markets.
  4. Insurance

    Why Is Health Care So Expensive In The Us?

    The U.S. is the world leader in only one area of health care: costs. Why is it so hard to rein in these expenses?
  5. Economics

    The Most Likely Outcome For Greece

    After more than five years of a Greek drama, most of us have become fatigued with hearing about Greece’s debt problems, the one issue that won’t go away.
  6. Economics

    Explaining the Reserve Ratio

    Reserve ratio is the amount of cash a bank must keep in its bank vaults or deposit into a central, governing bank.
  7. Economics

    Understanding Austerity

    Austerity is an economic term describing government measures to reduce and eliminate budget deficits.
  8. Insurance

    Is My Health Insurance Good In Another State?

    Under ACA, is health care insurance something you can take with you state to state?
  9. Professionals

    Does Bernie Sanders Have A Chance?

    Bernie Sanders, an independent senator from Vermont, announced his candidacy for president last May. Does Sanders have a chance?
  10. Economics

    Explaining Limited Government

    Limited government is a political viewpoint that favors few, if any, government controls on individuals and the economy.

You May Also Like

Hot Definitions
  1. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  2. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  3. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  4. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  5. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  6. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!