Provision of Liquidity through the Primary Credit Facility during the Financial Crisis: A Structural Analysis
AbstractOver the course of the recent liquidity crisis, the Federal Reserve made several changes to its primary credit lending facility such as narrowing the spread between the primary credit rate and the target funds rate, increasing the terms of lending, and widening the range of acceptable collateral. In this paper, we use the model developed by Artuç and Demiralp (2008) to provide a structural assessment of the effectiveness of these changes. Our results suggest that most of these changes were highly effective in stabilizing the federal funds market.
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2009 Meeting Papers with number 215.
Date of creation: 2009
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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Other versions of this item:
- Erhan Artuç & Selva Demiralp, 2010. "Provision of liquidity through the primary credit facility during the financial crisis: a structural analysis," Economic Policy Review, Federal Reserve Bank of New York, issue Aug, pages 43-53.
- Erhan Artuç & Selva Demiralp, 2009. "Provision of Liquidity through the Primary Credit Facility during the Financial Crisis: A Structural Analysis," KoÃ§ University-TUSIAD Economic Research Forum Working Papers 0912, Koc University-TUSIAD Economic Research Forum.
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
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