Thoughts on the Fed's Release of Information on Crisis Measures
The Fed published information about programs to combat the crisis. The data indicate that the PDCF (Primary Dealer Credit Facility), under which the Fed loaned money against securitized assets, helped prevent a fire sale of assets, and the TAF, which originally was used by the largest financial institutions, increasingly came to support regional banks. They suggest as well that collateral-based LOLR (Lender of Last Resort) facilities like the TSLF (Term Securities Lending Facility) have become a part of central banks' toolkit. The Fed also created a framework for dollar operations by the world's central banks' toolkit. The Fed also created a framework for dollar operations by the world's central banks by extending swap lines. However, the frequent use of TAF (Term Auction Facility) and others by non-US financial institutions raises the question of how home- and host-country central banks should share responsibility for supplying liquidity during a crisis.
