2
 

The Temporary Liquidity Guarantee 

Program: A Systemwide Systemic 

Risk Exception 

Introduction 

During the unprecedented financial-market disruptions in the United States and abroad 

in the fall of 2008, government officials took extraordinary measures to calm market 

fears and encourage lending. One of these measures was the Federal Deposit Insurance 

Corporation’s (FDIC) Temporary Liquidity Guarantee Program (TLGP). The TLGP had 

two components. It provided a limited-term guarantee for certain newly issued debt 

not only of banks and thrifts but also of bank, thrift, and financial holding companies 

and eligible bank affiliates (the Debt Guarantee Program, or DGP). Additionally, the 

TLGP fully guaranteed certain non-interest-bearing transaction deposit accounts (the 

Transaction Account Guarantee Program, or TAGP). 

During the first half of October 2008, U.S. policymakers made the decision to 

implement these programs and achieved consensus both about the mechanism for 

creating them and about the policy trade-offs involved in their design. During this same 

short period, the FDIC worked to ensure that the two voluntary programs would be in 

place at the time of their announcement on October 14, and during the last months of 

2008, the FDIC refined the programs to increase their effectiveness. 

Of the approximately 14,000 entities eligible to participate in the DGP, about half 

opted into the program (though almost all the debt guaranteed was issued by fewer than 

50 such entities), and a significant majority of eligible institutions signed on to the TAGP. 

At their height, the DGP guaranteed almost $350 billion in outstanding debt and the 

TAGP covered over $800 billion in deposits. The programs were designed in such a way 

that expected fees would cover potential losses, but as it turned out, the fees charged to 

participating entities far outstripped the losses attributable to the TLGP as a whole.1

 The 

DGP ended on October 31, 2009, a year after its introduction (though guaranteed debt 

If the TLGP’s fees had been insufficient to cover losses, a systemic risk assessment would have been levied on 

all insured institutions; see the section below titled “The TLGP: Effects and Costs.” 

1 
34 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

remained outstanding until 2012). The TAGP, after two extensions, ended on December 

31, 2010. The TLGP proved effective in stabilizing financial markets, with the DGP 

reopening frozen debt markets to participating entities and the TAGP stabilizing deposit 

funding for insured depository institutions. 

The Policy Debate in October 2008 

With financial markets in turmoil, governments around the world sought to formulate 

and coordinate responses designed to return stability to those markets. In the United 

States and many other countries, the responses involved guaranteeing debt issued by 

banks and expanding deposit insurance coverage. In the United States, these two courses 

of action occasioned a policy debate among financial regulators, leading to the decision 

to use the systemic risk exception under the Federal Deposit Insurance Corporation 

Improvement Act of 1991 as the mechanism for providing the debt guarantees and the 

increased deposit insurance coverage. The box titled “The Systemic Risk Exception: 

Origins, Definition, and Procedure” provides background on the systemic risk exception. 

The G7’s Response to the Financial Crisis: Implications for the United States 

Faced with badly deteriorating conditions in financial markets, the Group of Seven 

finance ministers met in Washington, DC, and developed a plan to address these 

problems, focusing on liquidity, capital, and market stability. The plan was announced 

on October 8, 2008, and one of its goals was to “take all necessary steps to unfreeze 

credit and money markets and ensure that banks and other financial institutions have 

broad access to liquidity and funding.”2

 To achieve this goal, the governments of many 

advanced economies decided to guarantee debt issued by banks and other financial 

institutions, and to expand deposit insurance guarantees.3 

Given the frozen credit and money markets and the need to coordinate with the 

international response to the financial crisis, the United States had to determine what 

mechanism was appropriate for guaranteeing bank debt. The U.S. Treasury Department 

2	 See G7 Finance Ministers, “G7 Finance Ministers and Central Bank Governors Plan of Action,” October 

10, 2008, http://www.g8.utoronto.ca/finance/fm081010.htm. The members of the Group of Seven are the 

United States, Canada, France, Germany, Italy, Japan, and the United Kingdom. 

3	 In addition to the program in the United States, some form of debt guarantee was put in place in Australia, 

Austria, Belgium, Canada, Denmark, France, Germany, Greece, Ireland, Italy, the Netherlands, New 

Zealand, Portugal, Spain, Sweden, and the United Kingdom. See Sebastian Schich, “Expanded Government 

Guarantees for Bank Liabilities: Selected Issues,” OECD Journal: Financial Market Trends, 2009, no. 1, 5, 

http://www.oecd.org/finance/financial-markets/42779438.pdf. For the expansion of deposit insurance 

coverage internationally, see International Association of Deposit Insurers, “Discussion Paper on Cross 

Border Deposit Insurance Issues Raised by the Global Financial Crisis,” March 2011, 13–15, http://www.iadi. 

org/en/assets/File/Papers/Approved%20Research%20-%20Discussion%20Papers/IADI_CBDI_Paper_29_ 

Mar_2011_(Final_for_publication).pdf. 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 35 

(Treasury) later stated that if the United States were not to take actions similar to those 

being undertaken in Europe, “global market participants might turn to institutions and 

markets in countries where the perceived protections were the greatest.”4 

The Policy Response by U.S. Financial Regulators 

For approximately ten days in October, primarily over the weekend of October 11 and 12, 

senior officials from the FDIC, the Federal Reserve System, and Treasury debated how 

to respond to the paralysis throughout the credit markets. These officials had to reach 

agreement on what mechanism would be appropriate for guaranteeing bank debt, if any, 

and they had to agree on the extent of a transaction account guarantee. Guaranteeing bank 

debt was seen as the more consequential of the two actions, for two reasons. First, large 

banks needed access to the debt markets, and needed it right away. Second, guaranteeing 

bank debt would be an unprecedented foray into a type of guarantee that was totally new 

for the FDIC, whereas extending the deposit guarantee would be an incremental change. 

Underpinning the need to agree on the mechanism for guaranteeing bank debt and 

on the details for extending deposit coverage was the need to choose the resources that 

would stand behind these guarantees. The FDIC’s resources would clearly back insured 

deposits, but the debt guarantee was more problematic. One possible channel of funds 

was an appropriation by Congress. However, policymakers believed that Congress would 

not authorize funds over and above those it had—most reluctantly—just provided to 

the Troubled Asset Relief Program (TARP). Policymakers also considered TARP itself 

an unlikely source of funding for the debt guarantee. In addition, they believed that the 

Federal Reserve Board (FRB) had no authority to guarantee bank debt directly.5

 In their 

view, the only available method of providing broad guarantees of bank debt (and the only 

way to expand deposit insurance coverage without congressional action) was to use the 

systemic risk exception (SRE), which allowed open-bank assistance through the FDIC.6 

4 U.S. GAO, Federal Deposit Insurance Act: Regulators’ Use of Systemic Risk Exception Raises Moral Hazard 

Concerns and Opportunities Exist to Clarify the Provision, GAO-10-100, 2010, 18, http://www.gao.gov/ 

products/GAO-10-100. For discussion of the scope and design of foreign debt-guarantee programs, often 

in comparison with the U.S. program, see Schich, “Expanded Government Guarantees”; Fabio Panetta et 

al., “An Assessment of Financial Sector Rescue Programmes,” BIS Papers 48, 2009, http://www.bis.org/publ/ 

bppdf/bispap48.pdf; Aviram Levy and Sebastian Schich, “The Design of Government Guarantees for Bank 

Bonds: Lessons from the Recent Financial Crisis, OECD Journal: Financial Market Trends, 2010, no. 1, https:// 

www.oecd.org/finance/financial-markets/45636972.pdf; Aviram Levy and Andrea Zaghini, “The Pricing of 

Government-Guaranteed Bank Bonds,” Banks and Bank Systems 6, no. 3 (2011), https://businessperspectives. 

org/media/zoo/applications/publishing/templates/article/assets/js/pdfjs/web/4126; and Giuseppe Grande et 

al., “Public Guarantees on Bank Bonds: Effectiveness and Distortions,” OECD Journal: Financial Market 

Trends, 2011, no. 2, 47–72, http://www.oecd.org/finance/financial-markets/49200208.pdf. 

5 See Sheila Bair, Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself 

(2012), 113; Timothy Geithner, Stress Test: Reflections on Financial Crises (2014), 226; and Ben S. Bernanke, 

The Courage to Act: A Memoir of a Crisis and Its Aftermath (2015), 340. 

6 The TLGP was not the only use of the systemic risk exception during the financial crisis. For its application in 

the cases of the individual financial institutions Wachovia, Citigroup, and Bank of America from September 
36 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

The Systemic Risk Exception: Origins, Definition, and Procedure 

The roots of the SRE can be found in concerns that FDIC resolutions during the 

banking crisis of the 1980s and early 1990s had frequently protected uninsured 

depositors and creditors in addition to insured depositors. In February 1991, a 

congressionally mandated study of the deposit insurance system recommended 

that the FDIC should, in order to minimize the cost of resolving failed banks, seek 

to limit its protection to insured depositors whenever possible. To accomplish this 

goal, any failed-bank resolution was to be undertaken at the least cost to the deposit 

insurance fund. The study noted, however, that “the presence of systemic risk could 

require a decision to protect uninsured depositors even if it is not the least costly 

resolution method.” Although the report acknowledged the FDIC’s practice of 

consulting both the Board of Governors of the Federal Reserve System (FRB) and 

Treasury when it chose to protect uninsured depositors, the report stated that a 

systemic risk decision demanded “a broader government consensus that systemic 

risk exists and requires extraordinary government action” and recommended that 

the FRB and Treasury jointly make a systemic risk determination if they agreed on 

the need to protect uninsured depositors.a 

Congress incorporated the systemic risk determination into the Federal Deposit 

Insurance Corporation Improvement Act of 1991 (FDICIA), but amended the 

regulatory process that Treasury recommended.b Unless the SRE was invoked, 

FDICIA prohibited protection for uninsured depositors and other creditors if 

protecting those depositors and creditors would increase a resolution’s cost to the 

deposit insurance fund. It also required that the decision to grant an SRE be made 

by the Secretary of the Treasury in consultation with the President, but only after 

a written recommendation by a two-thirds majority of both the FDIC Board of 

Directors and the FRB. After an SRE determination was made, the FDIC would be 

authorized to act or assist as necessary to avoid the potential adverse effects of a 

major-bank failure. The SRE was not used until 2008. 

a See U.S. Department of the Treasury, Modernizing the Financial System: U.S. Treasury Department 

Recommendations for Safer, More Competitive Banks (1991), especially 27–28. 

b For policymakers’ views on the SRE as it was being considered, see Economic Implications of the 

“Too Big to Fail Policy,” Hearing Before the U.S. House of Representatives, Subcommittee on Economic 

Stabilization, Committee on Banking, Finance, and Urban Affairs, 102nd Cong. (1991). 

By October 13, after days of intense negotiation, the agencies reached agreement on 

the basic elements of the emergency program to guarantee bank debt and insure a broad 

subset of transaction deposits. The agreement immediately set in motion the process of 

requesting a systemic risk determination, in keeping with the procedure set forth in the 

2008 through January 2009, see chapter 3. 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 37 

Federal Deposit Insurance Corporation Improvement Act of 1991: the FDIC Board and 

the FRB voted to recommend a systemic risk exception to the Secretary of the Treasury, 

and the Secretary—after consulting with the President—quickly determined that a 

systemic risk existed. 

The resulting program—the two-part Temporary Liquidity Guarantee Program 

(TLGP)—was announced on October 14 in a joint press conference by the FDIC, 

the U.S. Treasury Department, and the Federal Reserve. In announcing the program, 

FDIC Chairman Sheila Bair emphasized that it was needed to stabilize the financial 

system and that it would be funded through fees charged to participating financial 

institutions, not taxpayers and not the Deposit Insurance Fund (DIF), which was 

intended to protect the deposits of bank customers.7

 The TLGP was a crucial element 

of a three-part U.S. government response to the financial crisis. The other two parts 

were the Treasury’s capital injections into banks under the TARP, and the Commercial 

Paper Funding Facility (CPFF) under the aegis of the FRB. The three programs were 

designed to work together.8 

Policy Discussions: The Details of the TLGP 

To reach agreement about the details of the debt guarantee program, policymakers 

had to resolve several complex issues.9

 One was whether to guarantee bank debt that 

was already outstanding. There was concern that such a broad guarantee might prove 

too large a liability to cover and might create a windfall for those institutions that had 

invested in bank debt, but arguments were also made that the guarantee needed to be as 

wide as possible. Another issue was whether to guarantee debt issued by bank holding 

companies (BHCs) and their nonbank affiliates. Some worries were expressed that there 

might have been legal impediments to guaranteeing such debt, and questions were raised 

about whether such a guarantee was in fact desirable. However, the view was also held 

that not guaranteeing debt issued by BHCs would leave U.S. banks at a competitive 

disadvantage, since European debt guarantee programs would cover the debt issued by 

the large universal banks in those countries. A third area of debate was whether to assess 

a fee for guarantees, and a fourth was whether creditors should bear any loss on bonds 

whose issuers defaulted. On the question of fees charged to entities that would issue 

guaranteed debt, there was agreement that a fee should be assessed but a spectrum of 

opinion on how much the fee should be. Arguments were made for (1) a minimal fee 

7 See FDIC, “Statement by FDIC Chairman Sheila Bair,” FDIC Joint Press Conference with U.S. Treasury and 

Federal Reserve, Press Release, October 14, 2008, https://www.fdic.gov/news/news/press/2008/pr08100a. 

html. 

8 For an overview of the CPFF, see Tobias Adrian et al., “The Federal Reserve’s Commercial Paper Funding 

Facility,” Federal Reserve Bank of New York Economic Policy Review, May 2011, 25–39. 

9 This discussion is based on Bair, Bull by the Horns, 109–20; Geithner, Stress Test, 226–38; and Bernanke, The 

Courage to Act, 339–42. 
38 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

to encourage participation, (2) a fee calibrated to replicate funding costs during normal 

market conditions, and (3) a fee that took into account the cost of potential defaults. 

As for creditors bearing loss if a bond issuer defaulted, an early proposal suggested that 

creditors bear a 10 percent loss on such bonds, but many policymakers viewed this as 

undercutting the purpose of the guarantee. 

In the end it was agreed that the debt guarantee program would cover only newly 

issued debt and for a limited range of maturities. BHC debt would be covered, but with 

a limitation on thrift holding companies’ ability to participate in the debt guarantee 

program and with the proviso that the FDIC would approve applications for guarantees 

of debt issued by nonbank affiliates of BHCs on a case-by-case basis. These restrictions 

were necessitated by the large number of thrift holding companies and BHC affiliates 

and the attendant difficulty in assessing the risk to the FDIC from guaranteeing their 

debt. The costs to program participants would be low but meaningful, and creditors 

would not face a loss on bonds whose issuers defaulted. 

To reach agreement on the expansion of deposit insurance coverage, policymakers had 

to decide whether to expand deposit insurance coverage beyond what the FDIC already 

offered and, if so, to what extent. Bank deposits were an important form of liquidity for 

many smaller banks, and such banks faced risk from potential runs by entities holding 

deposits above the insurance limit, such as small businesses and municipalities. To 

forestall such runs, the FDIC had argued several weeks earlier that the agency should 

extend an unlimited guarantee to transaction accounts at banks, believing that such 

a guarantee would promote public confidence in banks, but at that time the proposal 

for such a guarantee was not adopted. It was later noted that there had been a general 

opposition to such an expansion of deposit insurance because of moral hazard, but that 

during the crisis, expansion of the insurance guarantee was thought to be warranted 

because, without it, there could be rapid deposit outflows from smaller banks into banks 

that were perceived to be too big to fail. 

In the end, the proposal for an unlimited guarantee of transaction accounts at banks 

was agreed to as part of the TLGP. The policymakers therefore ended up striking a 

balance among their varying views on providing these two forms of assistance to the 

financial system. 

The Case for a Systemic Risk Exception 

At the same time that these policy discussions were being held, FDIC staff was 

gathering data and other information to support the case for a systemic risk exception. 

The information was assembled in a memorandum that the FDIC Board would 

consider before voting on the issue.10 The memorandum documented the growing and 

10 This section is largely based on that memo: FDIC, “Memorandum to the Board of Directors: FDIC Guarantee 

of Bank Debt,” October 13, 2008. For further discussion of the events and trends during the second half of 

2008, see chapter 1. 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 39 

unprecedented disruption in credit markets and the concomitant effects on banks’ ability 

to obtain funding and to extend credit. Banks had responded to the crisis by retaining 

cash and tightening lending standards. Borrowing by businesses, households, and state 

and local governments had slowed significantly, and the trend was likely to continue. 

The interbank market as defined by the TED (Treasury-Eurodollar) spread was normally 

stable at just below 25 basis points (bps), but the spread had been rising significantly 

since 2007; by August 2008 the spread had risen to 238 bps, and by October 9, to 415 bps 

(see Figure 2.1). At this level almost no interbank lending was taking place, and banks 

had ceased lending in the federal funds market.11 

Figure 2.1. Interbank Lending Spreads, December 2006–December 2010 

Percent 

5 

4 

3 

2 

1 

0 

-1 

Weekly 

Source: Federal Reserve Bank of St. Louis. 

Dec-06 

Jun-07 

Dec-07 

Jun-08 

Dec-08 

TED Spread 

LIBOR-OIS 1-Month Spread 

Jun-09 

Dec-09 

Jun-10 

In addition, since Lehman Brothers Holdings, Inc., filed for bankruptcy, on 

September 15, even creditworthy companies had been having difficulty successfully 

issuing commercial paper, especially at longer maturities, and any debt that was being 

issued carried extremely high interest rates even for very short-term instruments. 

11 The federal funds market allowed commercial banks that had excess reserves on deposit at regional Federal 

Reserve banks to lend those funds to financial institutions that had liquidity needs. 
40 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

Securitization markets for both residential and commercial mortgage-backed securities 

had essentially shut down, and issuances of other types of asset-backed securities 

had also fallen drastically. Flight to safety had greatly increased Treasury “fails” (the 

failure to deliver Treasury securities), demonstrating both increased demand for U.S. 

government securities and the scarcity of these securities. 

Short-term funding markets in particular were essentially frozen, and in this 

environment many banks and BHCs found it hard to replace funding at a reasonable 

cost. The short-term funding channels that were normally available to financial 

institutions had become problematic and expensive, when they were available at all. 

Figure 2.2 shows the unusual length of time during which almost no bank senior 

unsecured debt was issued after the Lehman bankruptcy. Had the TLGP not been 

implemented, that situation could have continued. 

In addition, the FDIC had examined the effect that a 5 percent run on uninsured 

deposits would have on economic activity and found that a stressed environment could 

reduce GDP growth by nearly 2 percent per year, a reduction that could either create or 

prolong a recession.12 Although no evidence suggested that such a large run was happening, 

uninsured deposits were leaving banks that were perceived to be troubled, and the FDIC 

had anecdotal evidence that even healthy banks were experiencing deposit outflows. 

Figure 2.2. Trends in Senior Unsecured U.S. Bank Debt Issuance before and after 

September 2008 

0 

2 

4 

6 

8 

10 

12 

14 

16 Issued under TLGP 

Senior Unsecured 

Billions of Dollars 

0 

2 

4 

6 

8 

10 

12 

14 

16 

2005 2006 2007 2008 

Lehman Bankruptcy: 

September 15, 2008 

Jan 2008 Apr 2008 Jul 2008 Oct 2008 

Source: Bloomberg. 

12 See 73 Fed. Reg. 64180 (Oct. 29, 2008). 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 41 

The Systemic Risk Exception Reinterpreted 

Before the 2008 crisis, policymakers and industry observers generally thought that 

FDICIA’s systemic risk exception was intended to apply to an individual troubled 

institution. The situation that policymakers were confronting in 2008, however, 

involved not only the possible failure of a single institution, or even of a single market, 

but dysfunction throughout much of the financial system. These circumstances led 

policymakers to reexamine the scope of the systemic risk exception. 

Their rationale for viewing the systemic risk exception as appropriate in this set of 

conditions was, first, that the intent of the proposed two-part TLGP was to mitigate 

the effects of credit market disruption and lessen the losses to the FDIC that would 

likely result from inaction. Second, safeguards were built into the two component 

programs: the guarantees would be limited in duration and scope; the programs would 

be industry funded, with a fee structure that was expected to protect the DIF; and 

the participating institutions would be subject to careful oversight. Finally, the total 

proposed program was integral to the overall three-part U.S. response to systemic risk 

in the banking system (as noted above, the other two parts were the Treasury’s TARP 

capital infusions and the Federal Reserve’s CPFF). 

The FDIC’s Board of Directors, while unanimously approving the systemic risk 

exception and strongly supporting the TLGP, was well aware that the agency was 

heading into new territory: then Vice Chairman Martin Gruenberg remarked that “this 

action being proposed today ... is perhaps the most extraordinary ever taken by an 

FDIC Board.” Given the innovative nature of the action, House and Senate leaders had 

been consulted in advance about the steps the regulatory agencies were going to take 

and their support was obtained. More than one Board member observed that Congress 

would need to examine the statutory framework of the systemic risk exception to see if 

the exception as originally conceived was adequate to cover circumstances not foreseen 

in 1991, when the law was written.13 The box titled “Questions about the Statutory 

Authority for the TLGP” discusses the legal underpinnings for the guarantees provided 

by the FDIC under the new program. 

Questions about the Statutory Authority for the TLGP 

In 2010, the U.S. Government Accountability Office (GAO) examined the use of 

the systemic risk exception in 2008–2009. The report noted that the height of the 

financial crisis was the first time the government had used the exception and that 

the TLGP was created at a time of “volatile economic circumstances.” 

continued 

13 FDIC, Board of Directors Meeting Minutes (Oct. 13, 2008). 
42 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

The report went on to explain that the agencies (the FDIC, FRB, and Treasury) 

believed that FDICIA as drafted was unclear on how the systemic risk determination 

should be applied. Holding this belief, they thought the law’s provisions could 

be interpreted to allow a systemic risk determination when either the banking 

industry as a whole or just a single institution was in danger of causing the entire 

financial system to collapse. Moreover, the agencies believed that “a systemic risk 

determination waives all of the normal statutory restrictions on FDIC assistance, as 

well as creating new authority to provide assistance, both as to types of aid provided 

and as to the entities that may receive it.” Given these interpretations, the agencies 

chose to make what they called a “generic systemic risk determination.” They 

based their choice on two assumptions about bank-by-bank assistance: it would be 

ineffective, and it would be more costly to the FDIC than would the TLGP. 

The GAO acknowledged that it found some support for the agencies’ positions 

that the systemic risk exception could be used both to authorize the TLGP and to 

provide assistance of the scope that the TLGP provided, but the GAO also found 

that the agencies’ interpretations were open to question and raised significant policy 

issues. The report recommended that Congress clarify the statutory language about 

the requirements for, and assistance provided under, a systemic risk exception.a 

Congress revised the language as part of the Dodd-Frank Wall Street Reform and 

Consumer Protection Act in July 2010 (see the conclusion of this chapter). 

a For a detailed analysis, see U.S. GAO, Federal Deposit Insurance Act: Regulators’ Use of Systemic Risk 

Exception (2010), 43–57. 

The Creation of the TLGP and Initial Participation 

The TLGP was a complex program that needed to be created quickly. Normally any 

FDIC program, let alone one entirely new for the agency, would go through a relatively 

long rulemaking process before being put in place. But because of the emergent nature 

of the financial crisis, the TLGP took effect as soon as it was announced, on October 

14; the announcement was based on the FDIC’s best attempts to assemble an intricate 

program during the first two weeks in October. Immediately after announcing the two 

component programs of the TLGP, the FDIC briefed potential participants on how the 

Corporation expected the programs to work.14 

Just two weeks later, on October 29, the FDIC issued an interim final rule that 

elaborated on the broad outlines and specific elements previously presented, and at the 

same time the agency sought comments, though on a much more expedited schedule 

14 The transcripts of the conference calls can be found at https://www.fdic.gov/regulations/resources/tlgp/ 

archive.html. 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 43 

than usual.15 The interim final rule was amended on November 7 (again with a request 

for comments), and the final rule was adopted on November 21, only five weeks after the 

TLGP had been announced.16 Many of the comments helped improve the effectiveness of 

the program, particularly the debt guarantee component, as a tool for bringing stability 

to the financial markets.17 

The TLGP was structured as a voluntary program. When it began, all eligible entities18 

were automatically enrolled for the first 30 days at no cost, after which fees would be 

assessed to participants, and eligible entities would be allowed to opt out of either the Debt 

Guarantee Program (DGP) or the Transaction Account Guarantee Program (TAGP) or 

both.19 To eliminate an adverse selection problem (only the weakest entities would opt in, 

while stronger ones would opt out), all entities within a holding company were required to 

make the same decision about the DGP. 

More than half of the over 14,000 eligible entities decided to remain in the DGP during 

its initial period (the DGP would later be extended beyond its initial period, as discussed 

below), and more than 7,100 banks and thrifts, or 86 percent of FDIC-insured institutions, 

decided to remain in the TAGP. Most of the institutions that opted out of the DGP were 

those that had less than $1 billion in assets and issued no appreciable amount of senior 

unsecured debt. In addition, the FDIC placed restrictions on many entities’ participation 

in the DGP (see the next section for more detail). 

15 If an agency has enough reason to issue a final rule without first publishing a proposed rule, such a rule 

is often called an interim final rule; this kind of rule becomes effective on publication, but an agency may 

amend it later in response to public comments, as was the case with the TLGP interim final rule. 

16 See 73 Fed. Reg. 64179 (Oct. 29, 2008); 73 Fed. Reg. 66160 (Nov. 7, 2008); and 73 Fed. Reg. 72244 (Nov. 26, 

2008). 

17 Some of the most significant changes made in response to comments were the following: the definition 

of senior unsecured debt was revised; an alternative cap was provided for banks that had either no senior 

unsecured debt outstanding or only fed funds purchased; the debt guarantee limits of a participating insured 

depository institution and its parent BHC were combined; the timely payment of principal and interest 

following payment default was guaranteed; and the transaction accounts guarantee was broadened to cover 

both Interest on Lawyers Trust Accounts (IOLTAs) and negotiable order of withdrawal (NOW) accounts. 

Many of these changes are discussed below in the sections on the DGP and the TAGP. 

18 Eligible entities were (1) an insured depository institution; (2) a U.S. bank holding company, provided 

that it controlled (directly or indirectly) at least one subsidiary that was a chartered and operating insured 

depository institution; (3) a U.S. savings and loan holding company (with certain limitations), provided 

that it controlled (directly or indirectly) at least one subsidiary that was a chartered and operating insured 

depository institution; and (4) any other affiliates of an insured depository institution that the FDIC in its 

discretion designated an eligible entity. See 73 Fed. Reg. 64181 (Oct. 29, 2008) and 73 Fed. Reg. 72266 (Nov. 

26, 2008). 

19 When the nine largest banks were informed on the afternoon of October 13 that they had to accept capital 

infusions under TARP, they were also told that they had to opt in to the DGP. See Henry Paulson, On the 

Brink: Inside the Race to Stop the Collapse of the Global Financial System (2010), 364. Several months later, 

one observer would note that while some of the largest banks eagerly sought to exit the TARP, they were 

not similarly eager to abandon the TLGP. See Andrew Bary, “How Do You Spell Sweet Deal? For Banks, It’s 

TLGP,” Barrons, April 20, 2009. 
44 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

The Debt Guarantee Program 

The DGP provided liquidity by guaranteeing participating entities’ newly issued senior 

unsecured borrowing, thereby allowing participants to roll over maturing debt or issue 

additional debt. 

Ground Rules and Extensions 

The program excluded certain types of debt instruments, as it was specifically designed not 

to encourage exotic or complex funding structures and not to protect lenders who sought 

to make risky loans.20 Generally the FDIC capped guaranteed debt issuance at 125 percent 

of an entity’s senior unsecured debt that was outstanding as of September 30, 2008, and 

was scheduled to mature on or before June 30, 2009. The cap was set at this level to allow 

participants to roll over existing debt and have some room for their debt issuance to grow. 

For entities with no senior unsecured debt outstanding as of September 30, 2008, or with 

only federal funds outstanding, the limit was set at 2 percent of consolidated total liabilities 

as of September 30, 2008. 

As a condition of participation in the program, entities agreed to comply with any 

FDIC request that they provide relevant information about their debt issuances under 

the program. Another condition was that entities agreed to be subject to periodic FDIC 

on-site reviews (after the FDIC consulted with the appropriate federal banking regulator) 

to determine the entity’s compliance with the terms and requirements of the DGP. The 

FDIC also had discretion to terminate an entity’s continued participation in the DGP 

after consulting with the entity’s primary federal regulator.21 

Initially the DGP allowed participating entities to issue guaranteed debt until June 30, 

2009, with the guarantee set to expire on the earlier of the maturity of the debt or June 

30, 2012. In May 2009, however, the FDIC extended the program to reduce potential 

market disruption and to facilitate an orderly phase-out of the program.22 The issuance 

deadline was extended four months, to October 31, 2009, and the guarantee period 

was extended six months, expiring December 31, 2012. Participating entities that had 

issued DGP debt on or before April 1, 2009, could use the extension automatically, 

but others had to receive FDIC approval to use it. No entities that had opted out of the 

20 Debt eligible for the guarantee included federal funds purchased, promissory notes, commercial paper, 

unsubordinated unsecured notes (including zero-coupon bonds), and certain U.S. dollar-denominated 

certificates of deposit. From the program’s inception through December 5, 2008, the DGP covered debt with 

a maturity of 30 days or less, but in response to comments on the interim rule, the FDIC excluded debt with 

a maturity of 30 days or less and focused on stable, longer-term sources of funding, where liquidity was most 

lacking. The DGP was extended in 2009 to cover mandatory convertible debt. See 74 Fed. Reg. 9522 (Mar. 4, 

2009). The guarantee for such debt was set to expire on the earlier of the maturity of the debt, the conversion 

date, or June 30, 2012. 

21 Both the on-site review authority and the termination authority were rarely used. 

22 74 Fed. Reg. 26521 (Jun. 3, 2009). 
45 

Oct-08 Dec-08 Feb-09 Apr-09 Jun-09

Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10

Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11

Aug-11 Oct-11 Dec-11 Feb-12 Apr-12 Jun-12

Aug-12 Oct-12 

CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 

initial phase were permitted to make use of the extension. Debt outstanding over the 

course of the program is presented in Figure 2.3. 

Figure 2.3. DGP Debt Outstanding, October 2008–December 2012 

Billions of Dollars 

0 

50 

100 

150 

200 

250 

300 

350 

400 

Pricing and Limits on Participation 

To compensate for the FDIC’s risk, entities that issued debt were assessed fees. Initially the 

Corporation proposed an annualized flat-rate 75 basis point fee, after determining (by using 

credit default swap [CDS] spreads) that that amount would be substantially above the cost 

of “normal” credit protection but much lower than the very wide CDS spreads in October 

2008. This proposed fee structure was the product of consultation with the Federal Reserve 

and Treasury. In response to industry comments, however, the FDIC altered the flat-rate 

fee to a sliding fee schedule, with fees ranging from 50 to 100 basis points, increasing for 

longer-maturity debt.23 In addition, for holding companies whose affiliated banks’ assets 

constituted less than half of the holding company’s consolidated assets, the FDIC increased 

DGP fees by 10 basis points. Finally, in conjunction with the program’s extension in May 

2009, the FDIC added a surcharge to the guarantee fee on debt with a maturity of one 

23 An annualized fee of 50 basis points was applied to debt with a maturity of 180 days or less. The fees increased 

to 75 basis points for debt with a maturity of 181 to 364 days, and to 100 basis points for debt with a maturity 

of 365 days or more. 73 Fed. Reg. 72244 (Nov. 26, 2008). 
46 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

year or greater issued after April 1, 2009. The surcharge varied depending on the type of 

institution issuing the debt, with banks paying the lowest fees.24 

Some economists have suggested that the FDIC might have been better served by adopting 

a more discriminating pricing method, such as the market-based pricing mechanisms used 

by many similar European programs. For example, pricing for the UK program started 

with a flat base charge supplemented by an institution’s median five-year CDS spread in 

2007, the year before the program’s implementation. One study, using a sample of banks in 

both countries (U.S. and UK), calculated a “fair price” for the guarantee by using an average 

three-year CDS spread in November 2008, and compared the calculated fair price with the 

average UK guarantee fee and with the flat U.S. fee. The study found that the average UK fee 

was higher than the average calculated fair price (133.7 bps vs. 109.6 bps) but that the flat 

U.S. fee was substantially lower than the calculated fair price (75 bps vs. 255.4 bps).25 These 

results imply that the U.S. DGP provided a large subsidy to U.S. banks. A later study sought 

to quantify the subsidy, using a sample of almost $200 billion in guaranteed debt issued by 

six large U.S. entities. The study found that the six institutions saved almost $20 billion over 

the life of the bonds compared with what they would have spent for nonguaranteed debt; in 

other words, they saved substantially more than they paid the FDIC for the guarantee.26 As 

mentioned above, when the FDIC extended the DGP for four months beyond the original 

intended expiration of the program, surcharges were added for certain types of guaranteed 

debt, not only to encourage banks to exit the program but also to “reduce the subsidy 

provided by the DGP.”27 

It is important to understand that pricing was not the only tool the FDIC had available 

to address DGP-related risks. Not all institutions were permitted to participate in the DGP, 

and the FDIC limited others’ ability to do so. Specifically, the rule implementing the DGP 

permitted the FDIC, working with an entity’s primary federal regulator, to make exceptions 

to the entity’s debt guarantee limit—to increase, reduce, or restrict in some way the entity’s 

24 The surcharge was intended to compensate members of the Deposit Insurance Fund (DIF) (including those 

that did not issue FDIC-guaranteed debt) for bearing the risk that TLGP fees would be insufficient and that, 

as explained in the section below on the TLGP’s effects and costs, a systemic risk assessment would be levied 

on all insured institutions. Unlike the initial DGP guarantee fees, which were reserved for possible DGP 

losses and segregated from the DIF, the amount of any surcharge collected in connection with the extended 

DGP was to be deposited into the DIF and used by the FDIC when calculating the fund’s reserve ratio. See 

74 Fed. Reg. 26521, 26523 (Jun. 3, 2009). For an explanation of the fund’s reserve ratio, see chapter 5. 

25 See V. Acharya and R. Sundaram, “The Financial Sector Bailout: Sowing the Seeds of the Next Crisis?,” in 

Restoring Financial Stability: How to Repair a Failed System, ed. V. Acharya and M. Richardson (2009), 327– 

39. The authors wrote before the FDIC changed its pricing from 75 bps to the 50–100 bps scale depending 

on maturity; although this change would have altered their results somewhat, it would not have altered their 

conclusions. 

26 Levy and Zaghini, “The Pricing of Government-Guaranteed Bank Bonds.” The authors note that the total 

issuance was $184.9 billion, so even if all of the debt had incurred a fee of 100 bps, the total fee would have 

been less than $2 billion. 

27 74 Fed. Reg. 26523 (Jun. 3, 2009). The surcharges were also added to compensate DIF members, see note 24. 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 47 

ability to issue debt.28 The Corporation used this discretion extensively to mitigate its risk 

of loss from the DGP. 

In using this discretion, the FDIC and the other federal banking agencies developed a 

consultative process to review the debt limits of otherwise eligible entities that had adverse 

regulatory ratings29 or poor financial metrics, such as very high past-due ratios or poor 

capitalization, and in the case of several hundred weak institutions, the Corporation 

reduced to zero the amount of guaranteed debt they could issue. From the very start of the 

program, no troubled entities (those with supervisory ratings of 4 or 5) had been allowed 

to issue guaranteed debt, and soon thereafter the restriction was expanded to include many 

3-rated entities as well as de novo banks (the latter have a significantly higher likelihood 

of failure than do established institutions). In all, the FDIC restricted the participation of 

more than 1,600 banks and thrifts and 1,400 BHCs, or approximately 35 percent of banks 

and thrifts and 39 percent of bank holding companies and other eligible affiliates that had 

opted into the program as of year-end 2008. 

Challenges: Payment of Claims and Legal Issues 

Of the several challenges the FDIC faced in creating the DGP, the most significant one 

was how to address the payment of claims under the program. Another was how to handle 

numerous technical details. 

Having never undertaken such a guarantee before, the Corporation was confronted with 

both a novel problem and a natural tendency to think in terms of its longstanding methods 

for handling insured deposits. As a result, the initial interim rule the FDIC put forward 

for the payment of claims relied for triggers on the receivership process for banks and 

on bankruptcy filings for BHCs—but neither of those adequately took into account the 

expectations of market participants for prompt payment.30 In addition, the issue of timely 

payment could have had serious implications for how the rating agencies treated TLGPguaranteed debt. 

Indeed, Euroweek described the program as having been “on the brink of collapse” in 

early November and noted that senior bankers were “highly dissatisfied with the scheme 

as it then stood and predicted disaster for it.”31 After the initial interim rule was published, 

28 73 Fed. Reg. 72267 (Nov. 26, 2008). 

29 The regulatory agencies rate both insured depository institutions and BHCs on a scale of 1 to 5, with 1 being 

the highest rating and 5 the lowest. 

30 Initially, the FDIC proposed two different methods for the payment of claims, one for insured depository 

institutions (IDIs), the other for BHCs. For IDIs, the FDIC expected to use its established receivership 

process, which the agency believed would in most cases lead to payment of claims the next business day 

after failure so long as the claim was determined to be valid. For BHCs, the FDIC stated it intended to pay 

principal plus interest to the debtholder when the BHC filed for bankruptcy, but only after the claim was 

allowed under the bankruptcy code. If the FDIC did not pay within one business day of the filing, the agency 

would pay interest on the debt at the 90-day Treasury bill rate in effect at the time of the filing. 73 Fed. Reg. 

64184-85 (Oct. 29, 2008). 

31 Euroweek, “FDIC Fiddling Rescues Bank Liquidity Plan,” November 28, 2008, 10. 
48 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

parties that commented on it—including representatives of Bank of America, Bank of 

New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and 

Wells Fargo—urged that FDIC regulations provide that payment be made as principal and 

interest became due and payable, and they noted that if the FDIC failed to make payment as 

soon as an issuer defaulted, the demand for DGP debt would be severely curtailed because 

likely purchasers would be very concerned about timely receipt of scheduled payments 

with minimal risk exposure.32 

Standard & Poor’s (S&P) stated that in order for FDIC-guaranteed debt “to qualify for 

rating substitution treatment [in other words, for FDIC-guaranteed debt to receive the same 

rating as debt of the U.S. government], the terms of a guarantee had to be unconditional, 

irrevocable, and timely.” S&P warned, however, that the initial interim rule made it 

“uncertain whether payment of interest and principal under [the FDIC’s] guarantee would 

have to be made on a timely basis” and that, indeed, “there appears to be the potential for a 

significant delay in payment beyond the terms specified in the debt, even though ultimate 

repayment is expected.” S&P indicated that under the interim rule, guaranteed debt would 

“result in, at most, limited rating elevation for guaranteed obligations” and that unless 

the proposal was amended, “we would be unable to rate the debt of financial institutions 

qualifying for the FDIC guarantees at the ‘AAA’ rating of the U.S. government.”33 Such an 

outcome would have greatly reduced the effectiveness of the DGP. 

The FDIC recognized the validity of the commenters’ concerns, and the final rule, in 

November 2008, incorporated changes that assured debtholders they would continue to 

receive timely payments following payment default without compromising the FDIC’s 

ability to obtain enough information to pay claims appropriately.34 

The trigger for the payment obligation was changed from a bank failure or a bankruptcy 

filing to a payment default.35 In addition, the FDIC’s satisfaction of the guarantee would be 

32 See, for example, the comment letter at https://www.fdic.gov/regulations/laws/federal/2008/08c39AD37. 

pdf. The FDIC sought to acquire knowledge about the debt markets, and during the week of October 27 staff 

met with representatives of both S&P and Fitch to discuss their methods of rating debt securities. 

33 Tanya Azarchs and Scott Sprinzen, “U.S. Guarantees of Bank Debt under Interim Rules Do Not Promise 

Timely Payment,” Standard & Poor’s Ratings Direct (November 10, 2008), 2. Quotations from this publication 

are reproduced with permission of Standard & Poor’s Financial Services LLC. Standard & Poor’s Financial 

Services LLC (S&P) does not guarantee the accuracy, completeness, timeliness or availability of any 

information, including ratings, and is not responsible for any errors or omissions (negligent or otherwise), 

regardless of the cause, or for the results obtained from the use of ratings. S&P gives no express or implied 

warrantees, including, but not limited to, any warranties of merchantability or fitness for a particular purpose 

or use. S&P shall not be liable for any direct, indirect, incidental, exemplary, compensatory, punitive, 

special or consequential damages, costs, expenses, legal fees, or losses (including lost income or profits and 

opportunity costs) in connection with any use of ratings. S&P’s ratings are statements of opinions and are not 

statements of fact or recommendations to purchase, hold or sell securities. They do not address the market 

value of securities or the suitability of securities for investment purposes, and should not be relied on as 

investment advice. 

34 73 Fed. Reg. 72260 (Nov. 26, 2008). 

35 For the changes described here, see 73 Fed. Reg. 72263–4 (Nov. 26, 2008). 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 49 

such that the agency would continue to make scheduled interest and principal payments 

under the terms of the debt through its maturity.36 These changes addressed the concerns 

of both the industry and the rating agencies.37 With the program improvements in place, 

eligible entities quickly responded and, instead of claiming that the DGP was near 

collapse, Euroweek described it as having gotten off to “a scorching start,” with several 

large U.S. banks issuing $17 billion in guaranteed debt in late November after having 

been denied access to the market for months. The publication continued: “Clearly the 

once-reviled plan [had] ... been given a clean bill of health by the market.38 (The box 

titled “Institutions Using the Debt Guarantee Program” provides information about the 

use of the DGP by the largest financial institutions in the country—the group that issued 

the bulk of guaranteed debt. The appendix lists all the issuers of $250 million or more in 

debt guaranteed under the program.) 

Another important challenge was how to address numerous legal issues having to do 

with participation in the DGP. The final rule dealt with these difficulties by requiring 

an issuing entity to execute and file with the FDIC a “Master Agreement” that (1) 

acknowledged the establishment of a debt to the FDIC for any payment made under the 

program and agreed to honor the FDIC’s demand for payment on the debt immediately; 

(2) arranged for the DGP debtholder (a) to assign to the FDIC all rights and interests in 

that debt upon the FDIC’s payment under the guarantee and (b) to release the FDIC from 

any further liability with respect to that particular debt issuance; and (3) provided that 

the issuer could elect to designate an authorized representative to make claims on behalf 

of debtholders (claimants could choose, instead, to file with the FDIC individually, but 

the existence of an authorized representative for a class of debtholders was expected to 

permit a much faster response to a claim). 

* * * 

By mid-2009, financial markets were stabilizing, and DGP issuance was down 

significantly. In October, the FDIC approved a final rule ending the DGP on the last day of 

that month (on October 31, 2009), but with an emergency guarantee facility available on a 

36 For debt with final maturities beyond the DGP’s expiration, the FDIC could elect at any time after that date 

to pay all outstanding principal and interest under the debt issuance. 

37 For example, on November 24, Moody’s Investors Service announced that it would assign TLGP-guaranteed 

debt a rating of “Aaa,” the same rating it assigned the U.S. government, noting that the changes made to the 

program ensured timely payment (Moody’s Investors Service, “Moody’s Will Assign Backed-Aaa Ratings to 

Debt Securities Covered by the FDIC’s Guarantee,” Global Credit Research, November 24, 2008, https://www. 

moodys.com/research/Moodys-will-assign-backed-Aaa-ratings-to-debt-securities-covered--PR_167951). 

There remained some operational questions about how parties would proceed in the event of a default 

on DGP-guaranteed commercial paper. These questions were settled in April 2009 by a Memorandum of 

Understanding agreed to by the FDIC, the Depository Trust Clearing Corporation, the Federal Reserve Bank 

of New York, and the U.S. Treasury. 

38 Euroweek, “Goldman Leads TLGP Off to a Flying Start,” November 28, 2008, 9. 
 

50 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

case-by-case basis through April 30, 2010.39 The emergency facility carried very high fees 

(300 basis points). In announcing the availability of the emergency guarantee facility, Bair 

stated, “It should be clear that this is not a continuation of the program, but an ending of 

the program with just a short-term facility that is only available for clearly unforeseen and 

unexpected events.”40 The FDIC had always intended that the program be temporary; the 

emergency facility was never used and the DGP ended as scheduled on October 31, 2009. 

Institutions Using the Debt Guarantee Program 

Entities using the DGP ranged from small community banks to the largest financial 

institutions in the country, with the latter group issuing the bulk of guaranteed debt. 

The largest issuer was Citigroup, including Citibank and eligible affiliates, which 

issued almost $176 billion of guaranteed debt over the course of the program. Among 

banking organizations, the second-largest issuer was Bank of America Corporation, 

including its bank and eligible affiliates, which issued almost $131 billion; and 

the next-highest issuers among banking organizations were JPMorgan Chase & 

Company, its bank and affiliates; Goldman Sachs Group Inc.; and Morgan Stanley. 

Each of the three issued over $30 billion in guaranteed debt. 

Top Ten DGP Issuers by Dollar Amount ($ Billions) 

$175.90

$130.85 $130.84 

$42.51 $37.65 

$30.26 

$10.02 $7.40 $7.28 $5.90 

Citigroup, Inc. General Bank of JP Morgan Goldman Morgan Wells Fargo & GMAC LLC U.S. Bancorp American 

$175.90 

Electric America Chase Sachs Stanley Company Express 

Capital Corporation & Co. Group, Inc. Bank, FSB 

Corporation 

continued 

39 74 Fed. Reg. 54743 (Oct. 23, 2009).
 

40 Emily Flitter, “Way Out Gets Clearer as TLGP to End,” American Banker, October 21, 2009, 1.
 
 

51 

c 

CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 

The second largest issuer of DGP debt overall was General Electric Capital 

Corporation (GECC), which was a savings and loan holding company by 

virtue of its indirecta

 ownership of GE Money Bank, Salt Lake City, Utah. The 

FDIC’s TLGP rule allowed such holding companies to participate in the DGP, 

but only if they were engaged solely in activities permissible for a financial 

holding company under section 4(k) of the Bank Holding Company Act.b 

GECC was, however, not solely engaged in those permitted activities, and so 

instead it applied (as was also allowed) to participate based on its status as an 

affiliate of an insured depository institution that had received the requisite 

endorsement from the appropriate federal banking regulator (in this case, 

the Office of Thrift Supervision). After some discussion between GECC’s 

parent, General Electric (GE) and the government, the FDIC approved the 

firm’s participation. The FDIC judged GECC’s capital and risk management to 

be solid, and since GE agreed to guarantee the FDIC against loss, GECC’s fees 

would help bolster the FDIC’s reserves and offset potential losses in the DGP.c 

A number of U.S. bank subsidiaries of very large foreign banking organizations 

also issued guaranteed debt; these included Union Bank (the U.S. subsidiary of 

Mitsubishi UFJ Financial Group, Inc.); HSBC Bank USA, National Association (the 

U.S. subsidiary of HSBC Holdings, PLC); and Bank of the West (the U.S. subsidiary 

of BNP Paribas). 

a GECC’s two bank subsidiaries (GE Money Bank and GE Capital Financial, Inc.) were direct, wholly 

owned subsidiaries of GE Consumer Finance, Inc., which was wholly owned by GECC. 

b 12 U.S.C. §1843(k). 

On GECC, see Paulson, On the Brink, 373, 400; and Bair, Bull by the Horns, 118. 

The Transaction Account Guarantee Program: Purpose, Fees,

and Extensions 

Under the TAGP, the FDIC provided a guarantee of all funds held in non-interest-bearing 

transaction accounts at participating banks until December 31, 2009 (the guarantee was 

extended twice, first through June 30, 2010, and then through December 31, 2010, as 

discussed below).41 The program was intended to encourage customers to keep their 

41 The interim rule defined a qualifying account as “a transaction account with respect to which interest is 

neither accrued nor paid and on which the insured depository institution does not reserve the right to require 

advance notice of an intended withdrawal”(see 73 Fed. Reg., 64182 [Oct. 29, 2008]). But after receiving 

comments on the interim rule, the FDIC extended the TAGP to cover certain other types of deposit accounts 
52 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

deposits in their bank and thereby avoid runs at healthy banks. More particularly, the 

TAGP addressed the concern of bankers and others that, given the uncertain economic 

conditions, without the guarantee banks could lose many small-business accounts 

(including payroll accounts), which frequently exceed the insurance limit of $250,000.42 

The TAGP marked the first time the FDIC had offered deposit insurance above the 

statutory limit. In effect, the program gave institutions the option of purchasing deposit 

insurance for the otherwise uninsured balances of non-interest-bearing transaction 

accounts. In this way, assistance could be provided to smaller institutions that did not 

benefit from the DGP. This is not to say that larger institutions did not also participate in 

and benefit from the TAGP, for they did, but it is noteworthy that during the program’s 

extension through 2010, the proportional participation of banks with more than $10 

billion in assets dropped far more than did the proportional participation of smaller banks. 

Like the DGP, the TAGP imposed fees for using the program. The TAGP initially applied 

a 10 basis point annual assessment rate surcharge on non-interest-bearing transaction 

deposits and other qualifying accounts for amounts over $250,000; with the first extension, 

the fee was increased (see next paragraph). The total deposits covered by the TAGP are 

represented in Figure 2.4. 

The TAGP proved effective at preventing potentially disruptive shifts in deposit funding. 

As noted earlier in this section, the TAGP was intended to expire on December 31, 2009, 

but because bank failures continued to increase during 2009, the FDIC was concerned 

that terminating the TAGP too quickly could unnerve uninsured depositors and undo 

the progress made in restoring credit markets. Therefore, the FDIC Board extended the 

TAGP for an additional six months, through June 30, 2010.43 As part of this extension, the 

surcharge was increased from a flat rate of 10 basis points to a risk-based rate. Participating 

banks paid an assessment rate of 15, 20, or 25 basis points, depending on the institution’s 

deposit insurance assessment category (for deposit insurance assessment categories, see 

chapter 5). Institutions participating in the TAGP were allowed to opt out of the program 

effective on January 1, 2010. Over 6,400 institutions (or 93 percent of the institutions that 

were participating at year-end 2009) elected to continue in the TAGP through June 30, 2010. 

important to sole proprietorships and charitable organizations. These included Interest on Lawyers Trust 

Accounts (IOLTAs) and negotiable order of withdrawal (NOW) accounts where the participating institution 

committed to maintaining a rate no higher than 0.5 percent; this maximum was lowered to 0.25 percent as 

part of the second extension of the program. 

42 The Emergency Economic Stabilization Act of 2008 temporarily raised the basic FDIC insurance limit from 

$100,000 to $250,000 effective October 3, 2008; Dodd-Frank, in 2010, made the increase permanent. 

43 74 Fed. Reg. 45093 (Sept. 1, 2009). 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 53 

Figure 2.4. Amounts Guaranteed by the TAGP, 2008–2010 

Billions of Dollars 

0 

100 

200 

300 

400 

500 

600 

700 

800 

900 

Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 

Even after that first extension, the lingering consequences of the financial crisis and 

recession continued to put pressure on banks’ earnings and asset quality. Those effects 

were expected to persist and could have had the potential to undermine banks, particularly 

banks exposed to local markets that had experienced the greatest distress. The FDIC 

was concerned that allowing the TAGP to expire in June as scheduled could lead to the 

withdrawals of large transaction accounts at many community banks, possibly resulting in 

needless liquidity failures of those banks or lower deposit franchise values (for a discussion 

of franchise value, see chapter 6). The FDIC therefore authorized a second six-month 

extension, until December 31, 2010, leaving in place the surcharges that had been imposed 

during the first extension. The Corporation left open the possibility of yet a third extension, 

but not beyond year-end 2011.44 However, passage of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act (Dodd-Frank) in July 2010 eliminated the need for such an 

extension, as the law mandated that the FDIC provide an unlimited guarantee, funded by 

the DIF, of all non-interest-bearing transaction accounts from December 31, 2010, through 

December 31, 2012.45 Thus, the TAGP ended on December 31, 2010. 

44 See 75 Fed. Reg. 20247–65 (Apr. 19, 2010). 

45 For the implementation of the Dodd-Frank provisions regarding unlimited coverage of non-interest-bearing 

transaction accounts, see 75 Fed. Reg. 69577 (Nov. 15, 2010). The guarantee provided under Dodd-Frank 

did not, however, cover IOLTAs or NOW accounts. On December 29, 2010, a subsequent statute amended 
54 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

The TLGP: Effects and Costs 

The DGP enabled financial institutions to meet their financing needs during a period 

of systemwide turmoil. At a time when banks and other eligible institutions were unable 

to roll over their debt at reasonable rates and terms, the DGP reopened the short- and 

medium-term debt markets by allowing participating institutions to issue an array of 

guaranteed debt instruments. Figures 2.5 and 2.6 show that the eligible entities, after 

issuing mostly short-term debt (commercial paper) at the very beginning of the program, 

increasingly moved toward issuing debt at longer maturities. 

Figure 2.5. DGP Debt Outstanding by Type, October 2008–December 2009 

Percent 

0 

10 

20 

30 

40 

50 

60 

70 

80 

90 

100 

Oct-08

Nov-08 

Dec-08 

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09

Nov-09

Dec-09

Other Term Notes Other Interbank Deposits Interbank Eurodollar Deposits 

Other Senior Unsecured Debt Medium-Term Notes Commercial Paper 

the definition of non-interest-bearing transaction accounts to include IOLTAs. The FDIC implemented the 

amended definition effective January 27, 2011. See 76 Fed. Reg. 4813 (Jan. 27, 2011). 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 55 

Figure 2.6. Maturities of TLGP Debt Outstanding at Month End, October 2008– 

October 2009 

Billions of Dollars 

Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 

Greater than 3 Years 1–3 Years Less than 1 Year 

0 

50 

100 

150 

200 

250 

300 

350 

400 

Figure 2.7. Funding Costs: TLGP Debt vs. Non-Guaranteed Debt, January 2007– 

October 2009 

Basis Points 

600 

500 

400 

300 

200 

100 

0 

TLGP Debt to 

3-Year Treasuries 

Non-Guaranteed Debt to 

3-Year Treasuries 

158.1 

31.36 

Jan-07

Feb-07

Mar-07

Apr-07

May-07

Jun-07

Jul-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-08

Feb-08

Mar-08

Apr-08

May-08

Jun-08

Jul-08

Aug-08

Sep-08

Oct-08

Nov-08

Dec-08

Jan-09

Feb-09

Mar-09

Apr-09

May-09

Jun-09

Jul-09

Aug-09

Sep-09

Oct-09 

Source: Bloomberg. 
 

56 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

Specifically, the DGP lowered the cost of funding. For participating entities, the 

explicit FDIC guarantee—coming at a time when credit market spreads had reached 

record high levels—meant that DGP debt was assigned an AAA/Aaa rating. That rating 

allowed participating entities to raise funds and roll over maturing debt at significantly 

lower funding costs than the entities could have obtained by issuing debt not guaranteed 

by the government (see Figure 2.7). A 2017 study found that DGP-guaranteed bonds 

“vastly improved new and pre-existing debt liquidity” and that the program ultimately 

lowered the default risk of the institution (as well as of the insured bond) and, in addition, 

improved the liquidity for non-guaranteed bonds issued by DGP participants.46 A 2013 

study found that the DGP led to a drop in yield of AAA/Aaa financial debt near the time 

of the announcements of FDIC-guaranteed debt issuance and to a general pattern of 

decreasing yield spreads over time.47 

Figure 2.8. TLGP vs. Non-TLGP Debt Issuance, October 2008–October 2009 

Billions of Dollars 

0 

20 

40 

60 

80 

100 

120 

140 

160 

180 

Non-TLGP $323.7 billion 

TLGP $618.3 billion 

Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 

Sources: FDIC and Bloomberg. 

Note: TLGP debt includes medium-term notes, other senior unsecured debt, other term notes, commercial paper, 

Eurodollar interbank deposits, and other interbank deposits. Non-TLGP includes all types of bonds and structured notes 

except TLGP debt, commercial paper, and Eurodollar or other interbank deposits. 

46 See Jeffrey Black et al., “Benefits of Debt Guarantees: Evidence from the FDIC Debt-Guarantee Program” 

(unpublished manuscript), February 2017, https://editorialexpress.com/cgi-bin/conference/download. 

cgi?db_name=SWFA2017&paper_id=151. 

47 See Brent Ambrose et al., “The Financial Crisis and Temporary Liquidity Guarantee Program: Their Impact 

on Fixed Income Markets,” Journal of Fixed Income 23, no. 2 (2013): 5–26. 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 57 

In the wake of the DGP, debt markets stabilized. By September 2009, most banks 

were trading in the CDS market below where they were before the Lehman bankruptcy, 

and a senior syndicate banker remarked, “Good progress has been made so it makes 

sense for the TLGP to be withdrawn.”48 Indeed, only a few entities had issued DGP 

debt during the period of the DGP’s extension, a period when banks and their holding 

companies successfully issued non-guaranteed debt (see Figure 2.8). 

Another source of funding for banks, and in particular for community banks, is 

deposits held in transaction accounts. By removing the risk of loss to the businesses that 

commonly use these accounts to meet payroll and to serve other purposes, the TAGP 

stabilized deposit funding for insured banks.49 In the first quarter of 2009, banks reported 

586,519 non-interest-bearing transaction accounts over $250,000 in value, representing 

an increase of 12 percent compared with the fourth quarter of 2008. These first quarter 

2009 deposit accounts totaled $855 billion, of which $700 billion was guaranteed under 

the TAGP. At the peak of the program, in December 2009, more than 5,800 FDICinsured institutions reported having 685,465 non-interest-bearing transaction accounts 

over $250,000 in value, with deposits totaling just over $1 trillion. 

* * * 

If assessments for the TLGP (counting both components) had proved insufficient to 

cover the expenses related to the program, statute would have required that the FDIC 

levy a special assessment on all insured depository institutions (including those that 

had opted out, but not including BHCs or nonbank institutions that had participated) 

to cover the loss.50 However, overall, TLGP fees exceeded the costs of the program. 

Under the DGP, 121 entities issued guaranteed debt, with the FDIC collecting $10.4 

billion in fees and surcharges. Six entities defaulted on their debt, with the FDIC paying 

$153 million to cover the guarantee on those debt securities. 51 The majority of the FDIC’s 

48 Euroweek, “FDIC Plans Phase Out of Guarantee Programme,” September 11, 2009, 12. 

49 The TAGP also had an effect on FDIC resolutions during the crisis. In combination with the increased 

insurance coverage limit to $250,000, the TAGP greatly reduced the number of uninsured depositors at 

many failing banks. This reduction meant that there were many more whole bank–all deposit resolutions, 

as opposed to whole bank–insured deposit resolutions; the relative increase in whole bank–all deposit 

resolutions could have reduced the FDIC’s administrative costs. For a discussion of the different types of 

resolutions, see chapter 6. 

50 12 U.S.C. §1823(c)(4)(G)(ii). 

51 One of these losses involved fraud. Three employees of Coastal Community Investments (Coastal), a holding 

company that owned two Florida banks that would fail in 2010, were sentenced in 2014 to prison terms and 

were required to pay more than $4.5 million in restitution to the FDIC. Coastal had had a $3 million secured 

loan that was in default, and failure to repay the loan could have allowed its lender to take over the two 

Florida banks. In order to repay the loan and retain control of the banks, the employees misrepresented the 

loan as unsecured, allowing Coastal to borrow 125% of the $3 million amount and have it guaranteed under 

the DGP. Coastal then obtained a DGP-guaranteed $3.75 million loan from another bank. When Coastal 
58 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

payments ($113 million) stemmed from the outstanding DGP debt held by banks that 

failed in 2011. Under the TAGP, the FDIC collected $1.2 billion in fees; as of December 31, 

2016, estimated TAGP losses from failures were about $1.5 billion.52 The five failures with 

the highest resolution costs attributable to the TAGP, and the relationship between those 

costs and all other resolution costs attributable to the TAGP, are presented in Figure 2.9. 

Figure 2.9. The Costs of the TAGP: The 5 Most Expensive Failures vs. All Others 

($ Millions, as of December 31, 2016) 

$336.92 

$174.44 

$152.79 

$45.53 $91.59

$736.64 

Silverton 

Irwin Union Bank and Trust 

Colonial Bank 

Georgian Bank 

ShoreBank 

All Others 

Conclusion 

For the FDIC, the TLGP was extraordinary in several ways. First, during the Corporation’s 

first 75 years, it had never systematically protected bank debt, let alone bank holding 

company debt or the debt of nonbank holding company affiliates.53 Second, the FDIC 

later defaulted on this second loan, that lender filed a claim with the FDIC for the loan amount plus interest, 

and the FDIC paid the claim of just over $3.8 million. See U.S. Department of Justice, U.S. Attorney’s Office 

for the Northern District of Florida, “Bankers and Attorney Sentenced to Prison, for Fraud, False Statement, 

and Making a False Claim against the United States,” Press Release (August 22, 2014), https://www.justice. 

gov/usao-ndfl/pr/bankers-and-attorney-sentenced-prison-fraud-false-statements-and-making-false-claim. 

52 Because these totals were generated using estimated losses on failures as of December 31, 2016, they differ 

from totals reported by the FDIC at the end of the TAGP (December 31, 2010). 

53 During the 1980s, the FDIC, in the context of resolving troubled institutions, did protect debtholders several 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 59 

had never extended unlimited deposit insurance protection to a class of bank deposits 

(in this case, a broad subset of transaction accounts), although in the past the principle 

of unlimited deposit insurance coverage had been considered. Third, this was only the 

second time that the FDIC’s Board approved a systemic risk exception and the first time 

that the assistance was actually put in place (assistance to Wachovia had been approved 

two weeks earlier, but the need for it was subsequently obviated when Wells Fargo 

acquired that bank [see chapter 3]). Fourth, creation of the TLGP involved the use by 

bank regulators of a legal interpretation of the systemic risk exception that was at the 

least novel, as was acknowledged at the time. All these extraordinary features reflected 

the precarious state of the financial services industry in the fall of 2008. 

The TLGP, in concert with other government programs, brought stability to U.S. 

financial markets in a time of crisis. Conditions in the credit markets had improved 

significantly by the start of 2009, and by midyear they began returning to normal, 

despite still-elevated levels of problem loans; interest-rate spreads had retreated from the 

highs established during the depth of the crisis, during the fall of 2008; and activity in 

interbank lending and corporate bond markets had increased. Banks were able to issue 

debt without a government guarantee. This stabilization of the markets was accomplished 

with an industry-funded program that not only did not damage the DIF but, instead, 

substantially benefited it. Overall, during a period when the banking industry and 

the financial markets were in crisis, the TLGP made an important contribution to the 

stability of both. Looking back on the program, former chairman Sheila Bair noted that 

“if we ever again get into a situation where the entire financial system is seizing up, where 

even healthy and well-managed banks are having trouble accessing liquidity, I do think 

this is a good model to use.”54 

In several important ways, Dodd-Frank refined the range of actions that would be 

available for responding to future crises of the financial system, and did so essentially 

by limiting regulatory discretion should another crisis arise.55 In particular, the act 

repealed the use of a systemic risk exception to assist a troubled open individual 

times. In 1984, open-bank assistance to Continental Illinois National Bank and Trust Company included 

the protection of all general creditors; the open-bank assistance to First RepublicBank Corporation in 1988 

also protected all general creditors. Some bondholders were partially protected in the open-bank assistance 

to First City Bancorporation of Texas in 1988, and a year later, with the failure of MCorp, unsubordinated 

general creditors of 19 of the holding company’s banks were protected. See FDIC, Managing the Crisis: The 

FDIC and RTC Experience (1998), 554, 571, 595, 622. 

54 Joe Adler, “FDIC Debt Program Proves as Good as TARP, without the Baggage,” American Banker, 

April 26, 2012. 

55 See Martin Neil Baily and Aaron Klein, “The Impact of the Dodd-Frank Act on Financial Stability and 

Economic Growth,” Presentation at University of Michigan Center on Finance, Law, and Policy, October 24, 

2014, https://www.brookings.edu/on-the-record/the-impact-of-the-dodd-frank-act-on-financial-stabilityand-economic-growth/; and James Broughel, “Title XI: Fed Transparency and Bailouts,” in Dodd-Frank: 

What It Does and Why It’s Flawed, ed. Hester Peirce and James Broughel (2012), 121–35, https://www. 

mercatus.org/system/files/dodd-frank-FINAL.pdf. 
60 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

institution; and although Title XI does permit the creation of a program similar to 

the DGP, it also imposes restrictions on such a program.56 Dodd-Frank prohibits the 

creation of a future TAGP.57 

Title XI explicitly authorizes a “liquidity event determination.”58 The process of 

determining the existence of a liquidity event is similar to the process set forth in FDICIA 

for declaring a systemic risk exception: if the FDIC Board and the FRB determine that a 

liquidity event exists and that failure to act would significantly affect financial stability, 

and if the Secretary of the Treasury in consultation with the President concurs, the FDIC 

has the authority to create “a widely available program” to guarantee obligations of solvent 

insured banks or their holding companies (including holding company affiliates). 

But although the FDIC will be responsible for administering such a program, the 

maximum amount of outstanding debt that can be guaranteed is to be determined not 

by the FDIC but by the Secretary of the Treasury in consultation with the President. 

And, in a significant addition, the law also requires the program to have congressional 

approval in the form of a joint resolution—a requirement that essentially means 

Congress must pass the equivalent of a law before the program can go forward.59 So 

although Dodd-Frank provides for a program similar to the DGP, the law’s requirement 

for wider political consent through congressional approval (even though the approval 

would have to be considered on an expedited basis) could limit regulators’ flexibility 

during a future financial crisis. 

56 For the limits on the use of the systemic risk exception, see Dodd-Frank, §1106 [12 U.S.C 1823(c)(4)(G)(i)]; 

for the provisions allowing for a future DGP, see Dodd-Frank §1104–5 [12 U.S.C. 5611–12]. 

57 The law states that “a guarantee of deposits held by insured depository institutions shall not be treated as a 

debt guarantee program” under the provisions of the liquidity event determination (defined in note 58). See 

12 U.S.C. 5612(f). 

58 The law defines a liquidity event as “an exceptional and broad reduction in the general ability of financial 

market participants ... to sell financial assets without an unusual and significant discount or to borrow 

using financial assets as collateral without an unusual and significant increase in margin, or an unusual and 

significant reduction in the ability of financial market participants to obtain unsecured credit.” 

59 Like a bill, a joint resolution requires the approval of both the House and the Senate in identical form, 

and requires the President’s signature to become law (https://www.senate.gov/legislative/common/briefing/ 

leg_laws_acts.htm). 
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 61 

Appendix 

Table 2.A. Issuers of $250 Million or More in FDIC-Guaranteed Debt 

Breakdown by Affiliate 

Entity (if applicable) Amount Issuances 

1 Citigroup, Inc. TOTAL $175,903,888,595 1,655 

Citigroup, Inc. $13,850,000,000 5 

Citigroup Funding Inc. $128,997,377,222 1,165 

Citibank, National Association $33,056,511,373 485 

2 General Electric Capital TOTAL $130,850,166,935 4,328 

Corporation 

3 Bank of America TOTAL $130,842,662,031 1,454 

Corporation Bank of America Corporation $64,079,465,128 1,091 

Bank of America, National Association $46,976,837,903 281 

Merrill Lynch & Co., Inc. $19,786,359,000 82 

4 JPMorgan Chase TOTAL $42,512,382,326 189 

& Co. JPMorgan Chase & Co. $40,534,011,955 61 

JPMorgan Chase Bank, National $1,978,370,371 128 

Association 

5 Goldman Sachs Group, TOTAL $37,652,426,455 346 

Inc. 

6 Morgan Stanley TOTAL $30,256,932,941 57 

7 Wells Fargo & Company TOTAL $10,022,320,776 107 

Wells Fargo & Company $9,500,000,000 4 

Wells Fargo Bank, National Association $250,868,606 14 

Wachovia Bank, National Association $271,452,170 89 

8 GMAC LLC TOTAL $7,400,000,000 3 

9 U.S. Bancorp TOTAL $7,283,744,203 581 

U.S. Bank National Association $4,282,285,453 467 

U.S. Bancorp $3,001,458,750 114 

10 American Express TOTAL $5,900,000,000 3 

Bank, FSB. 

11 State Street Corporation TOTAL $5,289,431,500 53 

State Street Corporation $2,839,431,500 51 

State Street Bank and Trust Company $2,450,000,000 2 

12 John Deere Capital TOTAL $4,913,503,000 116 

Corporation 

13 HSBC USA Inc. TOTAL $4,742,598,079 24 

(subsidiary of HSBC HSBC USA Inc. $4,616,910,000 17 

Holdings, PLC) HSBC Bank USA, National Association $125,688,079 7 

14 Regions Bank TOTAL $4,200,000,000 6 

continued 
62 CRISIS AND RESPONSE: AN FDIC HISTORY, 2008–2013 

Breakdown by Affiliate 

Entity (if applicable) Amount Issuances 

15 PNC Funding Corp. 

16 SunTrust Banks, Inc. 

17 Union Bank, National 

Association 

18 KeyCorp 

19	 Sovereign 

Bancorp, Inc. 

20	 The Bank of New York 

Mellon Corporation 

21 Bank of the West 

22 Banco Bilbao Vizcaya 

Argentaria Puerto Rico 

23 New York Community 

Bancorp, Inc. 

24 The Huntington 

National Bank 

25 Wilmington Trust 

Company 

26 MetLife, Inc. 

27 Associated Bank, 

National Association 

28 Fifth Third Bancorp 

29	 Zions Bancorporation 

TOTAL 

TOTAL 

SunTrust Bank 

SunTrust Banks, Inc. 

TOTAL 

TOTAL 

KeyBank National Association 

KeyCorp 

TOTAL 

Sovereign Bank 

Sovereign Bancorp, Inc. 

TOTAL 

The Bank of New York Mellon 

Corporation 

The Bank of New York Mellon 

TOTAL 

TOTAL 

TOTAL 

New York Community Bank
 

New York Community Bancorp, Inc.
 

TOTAL 

TOTAL 

TOTAL 

TOTAL 

TOTAL 

Fifth Third Bank 

Fifth Third Bancorp 

TOTAL 

$3,900,000,000 4 

$3,576,000,000 3 

$3,000,000,000 2 

$576,000,000 1 

$2,210,000,000 13 

$1,937,500,000 4 

$1,000,000,000 1 

$937,500,000 3 

$1,600,000,000 2 

$1,350,000,000 1 

$250,000,000 1 

$1,040,412,845 73 

$603,448,298 2 

$436,964,547 71 

$1,002,889,124 2 

$686,440,926 31 

$602,000,000 2 

$512,000,000 1 

$90,000,000 1 

$600,000,000 1 

$460,000,000 11 

$397,436,000 1 

$395,000,000 6 

$285,500,000 4 

$285,000,000 3 

$500,000 1 

$254,892,500 1 

Note: The data presented in this table account for 99.7 percent of the debt issued under the DGP. Data on 

the remaining issuers can be found at https://www.fdic.gov/regulations/resources/TLGP/total_debt.html.
CHAPTER 2: The Temporary Liquidity Guarantee Program: A Systemwide Systemic Risk Exception 63 

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