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A visual review of the lending facilities created by the Federal Reserve during the credit crisis
Source: Federal Reserve. Last data point is August 2012. Amounts are in billions of dollars
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11 Primary Dealer
Credit Facility
12 Lending to American
International Group
1600
50
10
0 1400 $40 1200 0 $600
1000
1
500 800 400 600
1 Central bank
liquidity swaps
4 Discount lending
3
300
400
5
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2 8 4 12 6 7 9
200
11
100
2008
2008 09
10
11
12
2008 09
10
11
12
2008 09
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11
12
2008 09
10
11
12
1 Central bank liquidity swaps initially expired in early 2010, but were reactivated in May 2010, and again in November 2011 to deal with credit market tightness. 2. The TAF auctioned credit to depository institutions on a collateralized basis for periods of 28 and 84-days. 3. The Federal Reserve lent to CPFF LLC so that the CPFF could purchase three month unsecured as well as asset-backed commercial paper from eligible issuers 4. Discount window lending is the traditional means by which the Federal Reserve lends to depository institutions. Usually provided on an overnight basis, terms were stretched to 30-days during the crisis. Unlike TAF, discount loans are provided not by auction, but at a penalty to the market rate 5. The Federal Reserve created and lent to Maiden Lane LLC so it could purchase certain assets of Bear Stearns so as to facilitate the purchase of Bear Stearns by JP Morgan 6. The Federal Reserve created and lent to Maiden Lane II LLC so it could purchase residential mortgage backed securities from American International Group (AIG). 7. The Federal Reserve created and lent to Maiden Lane III LLC so it could purchase
collateralized debt obligations on which AIG Financial Products had written credit default swaps. 8. The Federal Reserve received an interest in the common stock of two AIG insurance subsidiaries, American International Assurance Company Ltd. (AIA) and American Life Insurance Company (ALICO). In exchange, the outstanding loans to AIG (12) were reduced by $25 billion. 9. TALF lent for terms of up to five years, accepting as collateral asset-backed securities secured by student loans, auto loans, credit card loans, or small business loans 10 The Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility lent to depository institutions so they might finance purchases of commercial paper held by money market mutual funds 11 The PDCF provided overnight funds to primary dealers on a collateralized basis 12 The Federal Reserve opened a line of credit for AIG. This was in part reduced by the creations of Maiden Lane II and III, and the transfer of AIA and ALICO