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It offered unlimited loans to commercial banks for up to a year against a broad range of collateral.
We will hold monthly repo auctions to provide predictable and regular access to high-quality collateral in exchange for a very broad range of collateral.
The Primary Dealer Credit Facility, which is made available to those investment banks that trade directly with the Fed, will loan money to those firms in exchange for a broad range of collateral, including hard-to-sell mortgage assets.
Beyond the billions in stated dollar amounts that it is providing Bear Stearns (and the potentially billions more it was on the hook for), the Fed agreed to open up a new lending facility to investment banks that will accept a "broad range" of collateral — meaning the largely illiquid assets that have dragged down banks' capital).
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As the lender of last resort, it must do more to save the banks by offering unlimited liquidity for longer duration against a broader range of collateral.
The Fed threw open its emergency lending facilities to investment banks, as well as accepting a much broader range of collateral in its open-market operations.
As the credit crisis has deepened, the central banks have made more money available against a broader range of collateral for longer periods to a wider group of financial firms.
The E.C.B. is providing unlimited three-year credit on easy terms to banks, against a wide range of collateral.
Developed economies need rules governing investment, a system of secured lending that makes it easy for creditors to take a broad range of assets as collateral and a workable tax regime.
Primary dealers, a group of about 20 big banks and brokers that deal directly with the Fed in its monetary policy operations and in Treasury bond auctions, can borrow at the discount rate by posting "a broad range of investment-grade debt securities" as collateral.
"The Federal Reserve's decision to create a lending facility for primary dealers and permit a broad range of investment-grade securities to serve as collateral improves the liquidity picture," he told The Times, and "from my perspective, takes the liquidity issue for the entire industry off the table".
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