Primary Dealer Credit Facility (FRBNY)

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The Primary Dealer Credit Facility (FRBNY)

Wall Street Bailout Accounting
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Balance Sheet
Disbursed*: $147.692B[1]
Current outstanding: $0 [2]
Public Funds
Maximum at-risk: $147.7B [3]
Current at-risk: $0 [4]

* See the methodology and glossary for definitions of "disbursed," etc.

Funding agency and aid type

The funding agency was the Federal Reserve.

Cheap Loans.

Who benefits

Financial firms.



“Primary Dealer Credit Facility (“PDCF”) — Total Potential Support: At Least $148 Billion. The Federal Reserve Board’s February 2009 Monetary Report to Congress states that “to bolster market liquidity and promote orderly market functioning, on March 16, 2008, the Federal Reserve Board voted unanimously to authorize the Federal Reserve Bank of New York to create a lending facility — the Primary Dealer Credit Facility [“PDCF”] — to improve the ability of primary dealers to provide financing to participants in securitization markets.” Loans are made to primary dealers, against which they must post eligible collateral — the definition of which has been expanded from all investment-grade securities to now include “all collateral eligible for pledge in tri-party funding arrangements through the major clearing banks. The interest rate charged on such credit is the same as the primary credit rate at the Federal Reserve Bank of New York.” The first participants in the PDCF were Merrill Lynch, Goldman Sachs, and Morgan Stanley; it was later expanded to include other primary dealers. The program is scheduled to terminate on February 1, 2010.”

Via Prins:[6]

“The Primary Dealer Credit Facility (PDCF) is an overnight loan facility that will provide funding to primary dealers in exchange for any tri-party-eligible collateral and is intended to foster the functioning of financial markets more generally.”


“The PDCF provides overnight loans to primary dealers (financial firms that can engage in direct transactions with the federal government). The Fed allocated $147.7 billion for it in 2009.”


The loans are recourse, overnight loans. The program was terminated on Feb. 1, 2010. According to SIGTARP, the program had a technically unlimited potential, but usage peaked at $147.7 billion on Oct. 1, 2008.[8]

A special bankruptcy court examiner for the Lehman Brothers bankruptcy found that Lehman used the PDCF in a “materially misleading” manner to disguise illiquid assets as cash shortly before its demise.[9]

Articles and resources

Related SourceWatch articles


  1. Figure is a proxy, represents the peak outstanding amount rather than the cumulative amount lent out over the life of the program. Federal Reserve Bank of St. Louis, “Series:WPDF - Primary Dealer and Other Broker-Dealer Credit,” [1] July 21, 2010.
  2. Federal Reserve Bank of St. Louis, “Series:WPDF - Primary Dealer and Other Broker-Dealer Credit,”[2] July 21, 2010.
  3. Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), “Quarterly Report to Congress – July 21, 2009,”[] pps. 140-141.Note “O” states that this facility had “technically unlimited” potential.
  4. Federal Reserve Bank of New York, “Primary Dealer Credit Facility,”[3], access March 10, 2010.
  5. SIGTARP July 2009 report, p. 145.
  6. Board of Governors of the Federal Reserve System, “Federal Reserve Announces Two Initiatives Designed to Bolster Market Liquidity and Promote Orderly Market Functioning”, press release, March 16, 2008; Board of Governors of the Federal Reserve System, “Factors Supplying Re- serve Balances: Detail for Loans”, H.41 Table 6 (accessed July 30, 2009); Federal Reserve Bank of New York, Primary Dealer Credit Facility: Frequently Asked Questions, (accessed September 10, 2009).
  7. Prins’ Mother Jones analysis. Dec. 21, 2009.
  8. SIGTARP July 2009 report, p. 141, note “o”.
  9. Eric Dash, “Fed Helped Bank Raise Cash Quickly”, New York Times, Mar. 12, 2010, accessed Mar. 13, 2010

External resources

External articles

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