Primary Dealer Credit Facility - PDCF

Following the 2008 financial crisis, things got pretty grim. Financial markets seized up. A new Great Depression seemed possible. In response, government regulators set up a number of emergency programs to loosen up markets and get them back to normal operation.

These endeavors included the primary dealer credit facility. It allowed primary dealers (large financial institutions that act as conduits for bond issues and other transactions central to market operations) to borrow funds directly from the Federal Reserve, the U.S. central bank. The PDCF would provide overnight loans at the rate offered by the Federal Reserve Bank of New York. Fundamentally, the government was offering cheap, short-term loans to inject liquidity into the markets. The goal was to add cash to the system. Basically...grease the wheels to get things going again.

The PDCF eventually loaned out nearly $9 trillion total over its lifetime, though the figure is a little misleading. As short-term transactions, most of that money was paid back quickly or rolled over into another loan. It's not like the Fed had $9 trillion out in loans at any one time.

The program eventually wound down in early 2010, after the financial markets settled down and started to work somewhat close to normally. All the money loaned out by the PDCF was paid back in full, including interest.