The US Federal Reserve has announced a new program to help ensure that banks have the ability to meet the needs of all their depositors in the wake of the collapse of two major banks.

The Fed says the Bank Term Funding Program will offer loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions with US Treasuries, mortgage-backed securities and other qualifying assets as collateral.

The Fed aims to stabilize the financial system with the new framework amid the escalating chance of bank runs following the collapse of California-based Silicon Valley Bank and New York's Signature Bank.

The Department of Treasury plans to make available up to 25 billion dollars from the Exchange Stabilization Fund.

The Fed says it is closely monitoring the situation and is "prepared to use its full range of tools to support household and businesses, and will take additional steps as appropriate."