Wednesday, July 30, 2008
The Federal Reserve announced this morning that both the Primary Dealer Credit Facility (PDCF) and its Term Securities Lending Facility (TSLF) will be extended in an effort to boost liquidity for a financial system that remains stressed. They also noted the introduction of auctions of options on $50 billion of draws on the TSLF and 84-day Term Auction Facility (TAF) loans as a complement to 28-day TAF loans along with an increase in the Federal Reserve's swap line with the European Central Bank to $55 billion from $50 billion.
Monetary policy used to be pretty boring with maybe one or two press releases a month showing up at the Federal Reserve's website consisting mostly of FOMC statements and meeting minutes about every six weeks or so.
That's changed quite a bit, though, the month of July (below) actually appears quite tame compared to other more "acute" periods in the credit crisis over the last year.
Thankfully, in a fiat money system, the lender of last resort doesn't have to worry about running out of money to lend. Do they?