The Primary Dealer Credit Facility – instituted on an emergency basis immediately after the failure of Bear Stearns – provided emergency lending to dealers, injected liquidity into the system, and provided a backstop that reassured markets. This public-sector support prevailed where implicit private-sector support had come into question, and helped stabilize the triparty repo market.
My third example of a funding channel characterized by tacit credit support is the securities lending market, which is driven in large part by demand for securities by financial institutions wanting to establish short positions or needing collateral to support other transactions.