This maturity extension program should put downward pressure on longer-term interest rates and help make broader financial conditions more supportive of economic growth than they would otherwise have been. The Committee also announced in September that it will begin reinvesting principal payments on its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities rather than in longer-term Treasury securities.
Page 2 of 6  Another important disadvantage of an implicit deposit guarantee system is that it relies on government funding and tends to be procyclical; as such, support is usually required at a time when the economy and the financial system may already be vulnerable as a result of wider-spread bank failures.