In the previous section, I have discussed an issue that has come to fore in the current crisis: the provision of central bank liquidity to financial institutions other than banks. An additional issue that has come up in the last few months concerns the extent to which central banks may engage in direct lending to the real economy.
This is not a purely theoretical subject for central banking conferences, as the recent establishment by the Federal Reserve System of several liquidity facilities directed to non banks shows (for instance, those in support directed to money market funds and issuers of commercial paper).