NEW YORK -(Dow Jones)- The Federal Reserve on Friday will conduct the last round of purchases of existing commercial mortgages, marking the end of a government program designed to buoy markets and boost investor confidence in securities that have been battered since the financial crisis in 2008.
The end of this part of the Term Asset-Backed Securities Loan Facility, or TALF, leaves a corner of the commercial mortgage market on its own, and investors won’t see new deals until later in the year, when regulators are expected to provide more clarity on securitization.
While the Fed’s role has been small relative to other programs–the central bank has granted only $11 billion in loan requests since last June–the impact has been much larger in a sector still in the throes of a painful correction.
“TALF provided psychological support for the market,” said Darrell Wheeler, head of commercial mortgages at Amherst Securities. “It served its purpose at the time it was needed.”
Senate Banking Committee Chairman Christopher Dodd’s draft bill for sweeping financial reform will consolidate banking regulators, as well as create a systemic risk council and a new consumer watchdog agency within the Federal Reserve, according to a source familiar with the contents of the legislation scheduled to be unveiled Monday.
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US Sens. Christopher J. Dodd (right) and Bob Corker.
Senator Bob Corker (R-Tenn.) who’s been working with Dodd on a bipartisan bill for more than a month, told CNBC.com Sunday evening that he expected Dodd to “introduce a bill that will be to the left of where we were — close, but left.”
Corker called Dodd’s draft “a much better bill” than the one the Connecticut Democrat offered in November, but added “he knows that will be a bill I cannot support.”
“Hopefully we can offer some amendments in committee and get it back into the middle,” he said.
With a deadline approaching, the Port Authority and the developer Larry A. Silverstein have so far been unable to resolve their longstanding differences for rebuilding ground zero, with the authority getting a chilly reception to its latest proposal.