FT: Primary dealer credit facility report to Congress

Emergency facilities tapped

The Fed launched a variety of emergency lending facilities as traditional sources of liquidity dried up.

The agency mortgage-backed securities purchase program allowed banks to exchange MBS for cash. The term auction facility allowed deposit-taking banks to bid for 28-day and 84-day loans and was open to “generally sound” US institutions and overseas banks with a US branch. The primary dealer credit facility allowed lending to a range of institutions on an overnight basis in exchange for collateral. Dealers also tapped the term securities lending facility, swapping illiquid collateral for liquid treasuries in deals that lasted a month. The term asset-backed securities loan facility allowed any holder of securities backed by assets to swap them for a Fed loan minus a haircut.