Indeed, during the financial crisis – which can be thought of as an old-fashioned bank run, but on the shadow banks – the Fed’s credit facilities were used in an effort to stop the run in the shadow banking system.
Such broad-based facilities were instrumental in ensuring that money market mutual funds were able to liquefy their assets and so meet investor withdrawals, that the markets for critical short-term funding remained open, and that funding remained available for securitizations that were, in turn, funding loans to students, car buyers, small businesses, and others.