Tuesday, Treasury Secretary Steven Mnuchin said he approved the creation of a new primary dealer credit facility to ease credit market disruptions caused by the coronavirus epidemic, resurrecting the 2nd Y 2008 financial crisis-era backstop in less than a day.
The facility, managed by the Federal Reserve Bank of New York, will offer loans up to 90 days to the 24 Wall Street primary dealers who are important conduits for the sale of a broad range of bonds and other financial assets.
Mnuchin said the primary dealer credit facility would be in place for at least 6 months and may be extended as conditions warrant.
Earlier Tuesday, Secretary Mnuchin approved a Fed backstop for the $1-T commercial paper market, using $10-B from the Treasury Exchange Stabilization Fund
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