July 2009, Matt Sherman
This paper looks at the trends in activity at the Federal Reserve’s newly-created special lending facilities, hoping to provide a better understanding of their operation and significance within financial markets. These facilities were created in response to the financial crisis and have expanded the Fed's balance sheet by over $1 trillion in terms of total assets. This sum is larger than the total price tag of the recent federal stimulus as well as the bank bailout authorized by the TARP. Yet both of these government responses have received enormously more public scrutiny than any of the actions taken by the Federal Reserve.