A second pair of facilities – the Term Auction Facility for depository institutions and the Term Securities Lending Facility for primary dealers – makes available predetermined aggregate amounts of longer-term funding on pre-announced dates, with the interest rate and the distribution of the awards across institutions being determined by competitive auction.
Although these facilities operate through depository institutions and primary dealers, they are designed to support the broad financial markets and the economy by facilitating the provision of liquidity by those institutions to their customers and counterparties. The Primary Dealer Credit Facility was put in place in the wake of the near-failure of Bear Stearns, a large investment bank.