Here is more:
John Weinberg, Federal Reserve Bank of Richmond said:
Since its inception, the Federal Reserve has been authorized to lend to banks. At first, access to the Federal Reserve Banks’ standard lending facility―known as the “discount window”―was limited to member banks, and collateral was limited to certain commercial paper―essentially short-term business and agricultural loans—and US Treasury securities. Later, during the strained credit conditions of the Great Depression, eligible collateral was broadened to include any asset acceptable to the lending Federal Reserve Bank. In addition, in 1932, Congress expanded the Fed’s lending authority beyond banks by adding Section 13(3) to the Federal Reserve Act, which permitted the Board of Governors, in “unusual and exigent circumstances” and under other conditions, to authorize Reserve Banks to extend credit to individuals, partnerships, and corporations.
The Fed also was a lender of last resort to other Central Banks around the world.
In addition to the strains in US funding markets, short-term dollar funding markets abroad also came under pressure. Many foreign banks were facing problems in raising dollars to fund their investments in dollar-denominated assets. To improve their access to dollar funding, the Federal Reserve established temporary central bank liquidity swap lines (also referred to as reciprocal currency arrangements) with a number of foreign central banks.
The FOMC authorized temporary dollar liquidity swap arrangements with fourteen foreign central banks between December 12, 2007, and October 29, 2008. The arrangements expired on February 1, 2010. In May 2010, in response to the reemergence of strains in short-term dollar funding markets abroad, the FOMC reauthorized dollar liquidity swap lines with five foreign central banks. At the peak of utilization of the dollar liquidity swaps, $586 billion was outstanding on December 4, 2008.
Helicopter Ben was a busy man, figuratively dropping money out of helicopters not only in the US but to a lesser extent outside the United States. The Federal Reserve established lines of credit with other Central Banks but never used them.
Credit was extended to primary dealers.
In March 2008, in response to liquidity pressures faced by primary dealers, the Federal Reserve established the Term Securities Lending Facility (TSLF) as a means of addressing the funding pressures faced by primary dealers. Under this program, the Federal Reserve loaned relatively liquid Treasury securities to primary dealers for one month in exchange for eligible collateral consisting of other, less liquid securities.
The Fed also facilitated the purchase of Commercial Paper. My guess is that AAA rated General Electric's inability to roll over its Commercial Paper raised eyebrows at the Fed and motivated the creation of this program.
In early October 2008, the Federal Reserve announced the Commercial Paper Funding Facility (CPFF). Under this program, the Federal Reserve provided three-month loans to a limited liability company (LLC), which in turn purchased commercial paper from eligible issuers. The commercial paper that was eligible for purchase was newly issued, highly rated, US dollar-denominated, unsecured, and asset-backed commercial paper with a three-month maturity.
The Fed got involved with Asset-backed securities. Was there anything Helicopter Ben wasn't involved in?
Asset-backed securities (ABS) are a common instrument used to finance a variety of consumer and business lending. In late 2008, interest rates on ABS rose and issuance fell sharply. In March 2009, the Federal Reserve, in cooperation with the US Department of the Treasury, introduced the Term Asset-Backed Securities Loan Facility (TALF). Under the program, the Federal Reserve issued nonrecourse loans with a term of up to five years to US holders of eligible ABS.
During the Financial Crisis, I was aware that the Fed was doing really extraordinary things to unfreeze the credit markets. In fact, I joked that all my credit cards would be reissued and that the new cards would say "Federal Reserve Bank." I joked that the Fed would buy my mortgage and my credit line at the Bank. Turned out I wasn't far off. This was more intervention than what I realized.
The Fed, in concert with TARP, and the Treasury was the lender of last resort for the whole economy.
Here is the link:
https://www.federalreservehistory.org/e ... t_programs
A fool and his money are good for business.