Expired Fed Lending Facilities

Earlier this week, four Fed lending facilities came to a close (see Fed release here), as previously announced, in light of improved conditions in financial markets. Among the expiring programs included the Commercial Paper Funding Facility, Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, Primary Dealer Credit Facility, and the Term Securities Lending Facility (links will direct you to a full description of each program at Stimulus.org).

Created between March and October 2008, these four programs added a total of roughly $850 billion in liquidity for financial markets during their peak levels reached in September and October 2008, when the deterioration in financial markets was most acute. However, since April 2009 lending through these facilities has largely tapered off. 

Fed documents and releases show that, together, these four programs could have added up to $2.15 trillion in liquidity if financial markets and participants had required such injections. Yet, programs such as the Commercial Paper Funding Facility never lent out anywhere near the $1.8 trillion it could have.

These four programs contributed to the Fed's extraordinary and unprecedented actions taken to provide support to specific parts of financial markets, in contrast to the Fed's usual approach in providing credit to the entire market.

Additional Fed programs will be expiring in the coming weeks, including the Term Auction Facility, the Term-Asset Backed Securities Loan Facility, and all mortgages purchases. CRFB will continue to track the lending and expiration of Fed programs at Stimulus.org.