New Primary Dealer Credit Facility from Fed

The Federal Reserve Board announced yesterday that, to support the credit needs of American households and businesses, the Fed will establish a Primary Dealer Credit Facility, or PDCF. The facility will allow primary dealers of the New York Fed to support smooth market functioning and facilitate the availability of credit to businesses and households. The PDCF will offer overnight and term funding with maturities up to 90 days and will be available on March 20, 2020. It will be in place for at least six months and may be extended as conditions warrant. 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 interest rate charged will be the primary credit rate, or discount rate, at the Federal Reserve Bank of New York.