ICYMI - Business in the US can now borrow directly from the Federal Reserve

Author: Eamonn Sheridan | Category: Central Banks

That is, if your firm is a big, investment-grade, company.

Central bank's (when acting as lender-of-last-resort) lent money to banks, secured by the banks' assets (usually those banks' business loans) which then lent to business.

That is the traditional model.

But now, the Fed can lend directly to businesses, rather than through banks through its 
"Primary Market Corporate Credit Facility" and its "Secondary Market Corporate Credit Facility" 
  • the first is lending direct to business
  • the second is where it will buy (investment-grade) corporate bonds  (and shares of corporate bond exchange-traded funds)
Matt Levine at Bloomberg explains it in more detail. 

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