Posted by: Michael Mandel on March 16
Imagine my surprise today (Sunday) when I went to the Federal Reserve site to pick up some industrial production data for my textbook. Instead, I found an emergency press release from the Fed, cutting the discount rate. What’s more, the Fed set up yet another way to lend to the big Wall Street firms, the “Primary Dealer Credit Facility.” This time, they can bring almost anything as collateral:
Primary dealers may secure loans under the PDCF with all collateral eligible for pledge in open market operations, plus investment grade corporate securities, municipal securities, mortgage-backed securities, and asset-backed securities.
The kitchen sink, indeed.
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