Federal Reserve Reestablishes Primary Dealer Credit Facility From the 2008 Financial Crisis
On March 17, 2020, the Federal Reserve Board announced the establishment of a Primary Dealer Credit Facility (“PDCF”) to allow primary dealers—broker-dealers that serve as trading counterparties for the Federal Reserve’s open market operations—access to short-term loans beginning on March 20, 2020. The PDCF will offer overnight and term funding with maturities up to 90 days and will function similarly to the way the Federal Reserve’s discount window provides a backup source of funding to depository institutions. Credit extended to primary dealers under this facility may be collateralized by a broad range of investment grade debt securities, including commercial paper and municipal bonds, and a broad range of equity securities. The Federal Reserve Board previously implemented a similar primary dealer credit facility in March 2008 to support primary dealers during the Financial Crisis.