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The Fed will accept shares as collateral for its loans to provide more liquidity

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The Federal Reserve (Fed) has relaunched a program used in the last financial crisis to allow authorized dealers borrow money backed by some higher-rated stocks, municipal debt, and corporate bonds as an additional contribution to alleviate liquidity shortages.

As announced on Wednesday the american central bank, a Line of Credit for Authorized Distributors (PDCF) for support the credit needs of households and businesses.

The PDCF will offer financing with maturities of up to 90 days It will be available on March 20, 2020 and will be in force for at least six months and can be extended as conditions require.

The credit granted to primary distributors under this service may be guaranteed by a wide range of investment grade debt securities, including commercial paper and municipal bonds, and a wide range of equity securities. The interest rate charged will be the primary credit rate, or discount rate, at the Federal Reserve Bank of New York.

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