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Federal Reserve Bank of New York July 2009 Forms of Federal Reserve Lending Primary Dealer Credit Facility Transitional Credit Extensions Reciprocal Currency Arrangements (announced (announced December 12, 2007) March 16, 2008)2 (announced September 21, 2008) (first announced December 12, 2007)3 U.S. and London brokerdealer subsidiaries of Goldman Sachs, Morgan Stanley, Merrill Lynch Select central banks to lend on to banks in their jurisdiction3 Primary dealers Term Auction Facility Term Discount Window Program Regular OMOs Discount Window1 Who can participate? Primary dealers Depository institutions What are they borrowing? Funds Funds Funds Funds Funds Funds U.S. Dollars What collateral can be pledged? U.S. Treasuries, agencies, agency MBS9 Full range of Discount Window collateral Full range of Discount Window collateral Full range of Discount Window collateral Full range of tri-party repo system collateral10,11 Full range of Discount Window collateral and tri-party repo system collateral11 Central banks pledge foreign currency and lend against eligible collateral in their jurisdiction Is there a reserve impact? Yes Yes Yes Yes Yes Yes What is the term of loan? Typically, term is overnight–14 days14 Typically overnight, but up to several weeks16 Up to 90 days17 28 days or 84 days15 Overnight Overnight Is prepayment allowed if term is greater than overnight? No Yes Yes No N/A Which Reserve Banks conduct operations? FRBNY All All All How frequently is the program accessed? Typically once or more daily As requested (standing facility) As requested (standing facility) Every other week, or as necessary Where are statistics reported publicly? Temporary OMO activity18 H.4.1 - Factors Affecting Reserve Balances19 H.4.1 - Factors Affecting Reserve Balances19 (announced August 17, 2007) 1 Discount Window includes primary, secondary and seasonal credit programs. 2 The AMLF, CPFF, PDCF and TSLF will remain in operation through February 1, 2010 as announced on June 25, 2009. 3 TAF activity ECB and SNB announced December 12, 2007; BOC, BOE, and BOJ announced September 18, 2008; RBA, Sverige Riksbank, DNB, and Norges Bank announced September 24, 2008; Reserve Bank of New Zealand announced October 28, 2008; Banco Central do Brazil, Banco de Mexico, Bank of Korea, and Monetary Authority of Singapore announced October 29, 2008. 4 The MMIFF will remain in operation through October 30, 2009 as announced on June 25, 2009. 5 The Federal Reserve Board is prepared to increase the size of the TALF to as much as $1 trillion and broaden the eligible collateral to encompass other types of newly issued AAA-rated asset-backed securities as announced on February 10, 2009. 6 Through the CPFF the FRBNY provides financing to an SPV that purchases eligible three-month unsecured and asset-backed commercial paper from eligible issuers. 7 (announced March 11, 2008)2 Money Market Term Asset-Backed ABCP Money Commercial Paper Investing Funding Securities Loan Market Fund Funding Facility Facility Facility5 Liquidity Facility (announced (announced (announced (announced October 7, 2008)2 October 21, 2008)4 November 25, 2008) September 19, 2008)2 Eligible Money Market All U.S. persons that Mutual Funds and other money market own eligible collateral investors7,8 Primary dealers Despository institutions, bank holding companies, U.S. branches and agencies of foreign banks Eligible CP issuers U.S. Treasuries U.S. Treasuries Funds Funds Funds and subordinated note U.S. Treasuries U.S. Treasuries, agencies, agency MBS, and all invesment First-tier ABCP Newly issued 3-month unsecured and assetbacked CP from eligible U.S. issuers U.S. dollar-denominated certificates of deposit, bank notes and commercial paper issued by highly rated financial institutions Yes No (loans are bond-for-bond) No (loans are bond-for-bond) Yes Yes Yes Yes Overnight to 3 months Overnight 28 days15 ABCP maturity date (270-day maximum) 3 months N/A 3 or 5 years N/A Yes N/A No No N/A N/A Yes FRBNY FRBNY FRBNY FRBNY FRBNY FRB Boston FRBNY FRBNY FRBNY As requested (standing facility) As requested (standing facility) Typically on schedule with FRBNY TAF auctions or as requested by central banks Daily Every four weeks As requested (standing facility) As requested (standing facility) As requested (standing facility) H.4.1 - Factors Affecting Reserve Balances19 H.4.1 - Factors Affecting Reserve Balances19 H.4.1 - Factors Affecting Reserve Balances19 Securities lending activity Term securities lending facility activity18 H.4.1 - Factors Affecting Reserve Balances19 H.4.1 - Factors Affecting Reserve Balances19 H.4.1 - Factors Affecting Reserve Balances19 Primary credit-eligible Primary credit-eligible Primary dealers depository institutions depository institutions 18 Securities Lending Term Securities Lending Facility grade debt securities10 Eligible institutions expanded on January 7, 2009 to include U.S.-based securities-lending cash-collateral reinvestment funds, portfolios, and accounts (securities lenders); and U.S.-based investment funds that operate in a manner similar to money market mutual funds, such as certain local government investment pools, common trust funds, and collective investment funds 8 Through the MMIFF the FRBNY will provide senior secured funding to a series of private sector SPVs to finance the purchase of certain money market instruments from eligible investors. 9 Reverse repos are collateralized with U.S. Treasuries. 10 PDCF and TSLF collateral expanded on �September 14, 2008. 11 Includes non-U.S. dollar denominated securities. 12 Includes auto loans, student loans, credit card loans, small business loans guaranteed by the U.S. SBA, mortgage servicing advances, business equipment related loans or leases, vehicle fleet leases, floorplan loans and commercial mortgages. Collateral was expanded on March 19, 2009, May 1, 2009 and May 19, 2009. 6 Funds Recently originated U.S. dollar-denominated AAA ABS, CMBS and legacy CMBS12,13 Twice a month, alternating between non-mortgage backed ABS and CMBS collateral types TALF activity18 Legacy CMBS includes to U.S. dollar-denominated CMBS issued before January 1, 2009. Open market operations are authorized for terms of up to 65 business days. 15 28-day and 84-day terms may vary slightly to account for maturity dates that fall on Bank holidays. 16 Primary credit loans are generally overnight. Loans may be granted for term beyond a few weeks to small banks, subject to additional administration. 17 Maximum maturity of term increased from overnight to 30 days on �August 17, 2007, and to 90 days on March 16, 2008. 18 Data only available for days when operations are conducted. 19 Data published on Thursday, as of close of business on Wednesday. 13 14