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544 Appendix A: Glossary

Term Asset-Backed Securities Loan Facility Federal Reserve program, supported by TARP funds,
to aid securitization of asset-based loans such as auto loans, student loans, and small business
loans.
Term Auction Facility Program in which the Federal Reserve made funds available to all deposi-
tory institutions at once through a regular auction.
Term Securities Lending Facility Emergency program in which the Federal Reserve made up to
 billion in Treasury securities available to banks or broker/dealers that traded directly
with the Federal Reserve.
tranche From the French, meaning a slice; used to refer to the different types of mortgage-backed
securities and CDO bonds that provide specified priorities and amounts of returns: “senior”
tranches have the highest priority of returns and therefore the lowest risk/interest rate; mezza-
nine tranches have mid levels of risk/return; and “equity” (also known as “residual” or “first
loss”) tranches typically receive any remaining cash flows.
Troubled Asset Relief Program Government program to address the financial crisis, signed into
law in October  to purchase or insure up to  billion in assets and equity from finan-
cial and other institutions.
TSLF see Term Securities Lending Facility.
undercapitalized Condition in which a business does not have enough capital to meet its needs,
or to meet its capital requirements if it is a regulated entity.
Write-downs Reducing the value of an asset as it is carried on a firm’s balance sheet because the
market value has fallen.