The Term Auction Facility may be the most interesting of the new data dumps, because this program was designed to remove discount window stigma:
Bank funding markets, especially term funding markets, came under severe pressure at the start of the financial crisis in 2007. Amid widespread concerns about the condition of many financial institutions, investors became very reluctant to lend, especially at maturities beyond the very shortest terms. To address these funding pressures, the Federal Reserve first took steps to increase the amount of liquidity available to financial institutions through the discount window. However, many banks were reluctant to borrow at the discount window out of fear that their borrowing would become known and would be erroneously taken as a sign of financial weakness. To meet the demands for term funding more directly, the Federal Reserve established the Term Auction Facility (TAF) in December 2007.
Under the program, the Federal Reserve auctioned 28-day loans, and, beginning in August 2008, 84-day loans, to depository institutions in generally sound financial condition. The TAF enabled the Federal Reserve to provide term funds to a broader range of counterparties and against a broader range of collateral than it could through open market operations. As a result, the TAF helped promote the distribution of liquidity when unsecured bank funding markets were under stress. It also provided access to term credit without the stigma that had been associated with use of the discount window.
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We’re going through it more right now. We see JPMorgan on there already. No Goldman Sachs to be found in the TAF, although they did receive this loan, which everyone did:
The PDCF functioned as an overnight loan facility for primary dealers, similar to the way the Federal Reserve’s discount window provides a backup source of funding to depository institutions. By providing a source of liquidity to primary dealers when funding was not available elsewhere in the market, the program helped to improve financial market conditions more generally.
Morgan Stanley, Citi, and Merrill were the biggest users of the PDCF.
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