Since 2002, the Bank has operated a program to lend a portion of its holdings when a specific bond or treasury bill is in high demand and is otherwise unavailable or trading below a certain threshold in the repo market. Lending our holdings provides a secondary source of liquidity, which helps maintain a well-functioning market.
As for the extension of credit, I have been advocating the need for diversified channels by constructing a “seamless credit provision system”, in which customers can choose any type of credit in the spectrum from borrowing from banks to raising funds in capital markets. Such a seamless system for credit provision can be developed within the context of a diversified division of labor.