With no end in sight for the financial crisis, the Federal Reserve said Tuesday it will extend three of its liquidity programs through April 30.
The primary dealer credit facility (PDCF), asset-backed commercial paper money market fund liquidity facility, and the term securities lending facility (TSLF) were scheduled to end on Jan. 30.
The three-month extension means these programs will now phase out at the same time as other facilities the Fed has introduced, including the commercial paper funding facility and the money market investor funding facility.
Fed Chairman Ben Bernanke has repeatedly assured market participants that liquidity programs will remain in place as long as they are needed, meaning further extensions beyond April are possible.
The extended programs target liquidity in different sectors of the market. The PDCF lends to investment banks or the investment bank units of commercial banks while the commercial paper facility provides loans against asset-backed paper held by financial institutions. The TSLF auctions Treasury securities.
