Although the U.S.Federal Reserve had traditionally made discount loans only to ________, in response to the financial crisis in 2008 the U.S.Federal Reserve made primary dealers eligible for discount loans as well.

Question

Quizplus · Accepted Answer

Traditionally, the U.S. Federal Reserve made discount loans primarily to commercial banks to assist them in managing short-term liquidity needs. During the financial crisis in 2008, the Federal Reserve expanded this eligibility to include primary dealers, which are banks and financial institutions that trade government securities directly with the Federal Reserve, to help stabilize the financial system.