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Pdcf A Veritable Firehose Of Liquidity

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by Felix Salmon
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The Political Independence of the Fed   Blogonomics: Glam Media

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Mar 20 2008 12:00am EDT

PDCF: A Veritable Firehose of Liquidity

We knew the Fed's new Primary Dealer Credit Facility, where it lends money to investment banks, was being used:

Morgan Stanley borrowed $2 billion Tuesday from the Fed using "pretty liquid" assets as collateral, said Chief Financial Officer Colm Kelleher. "We didn't need to, but I felt we should to show there was no stigma, and show support for what the Fed had done," he said.
Goldman Sachs Group Inc. tapped it for $100 million Tuesday. Lehman Brothers Holdings Inc. also used it.

But on this kind of a scale?!

PDCF borrowings, the scheme announced last Sunday night, are running at $28.8 billion as of last night.

I think it's safe to assume that substantially all those borrowings took place after the rate cut on Tuesday. And "last night" is Wednesday night. So that's $29 billion in borrowings in two days. Clearly the market was thirsty! Any idea who the biggest borrowers were?

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