DEFINITION of 'Primary Dealer Credit Facility - PDCF'

An institution created by the Federal Reserve to provide overnight loans to primary dealers through their clearing banks in exchange for eligible collateral. The Primary Dealer Credit Facility (PDCF) provides loans that settle the same business day and mature the following business day. As of February 3, 2009, the PDCF will remain in operation until October 30, 2009.

BREAKING DOWN 'Primary Dealer Credit Facility - PDCF'

The Primary Dealer Credit Facility was established in order to encourage financial markets to function more effectively. Primary dealers borrow overnight loans from the PDCF through their clearing banks at the primary credit rate offered by the Federal Reserve Bank of New York.

A frequency-based fee is assigned to primary dealers who borrow from the PDCF on more than 45 business days.

RELATED TERMS
  1. Dealer Incentive

    A corporate sales strategy in which the price a dealer has to ...
  2. Purchase and Resale Agreements ...

    An arrangement between the Bank of Canada and dealers whereby ...
  3. Primary Dealer

    A pre-approved bank, broker/dealer or other financial institution ...
  4. Term Securities Lending Facility ...

    A lending facility through the Federal Reserve that allows primary ...
  5. Privilege Dealer

    An individual or a securities firm that is registered as a market ...
  6. Note Auction

    A formal bidding process that is scheduled on a regular basis ...
Related Articles
  1. Insights

    What's a Dealer Market?

    In a dealer market, market participants buy and sell through dealers who are designated as market makers.
  2. Investing

    What Does a Dealer Do?

    Dealers possess certain qualities that distinguish them from brokers and traders.
  3. Investing

    A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  4. Small Business

    Bailout Acronyms 101

    The subprime meltdown gave rise to a mouthful of financial acronyms. Learn how to sort through this alphabet soup.
  5. Small Business

    How Does a Credit Facility Work?

    A credit facility is a loan or collection of loans a business or corporation takes to generate capital over an extended period of time.
  6. Personal Finance

    Watch the Fees on Your New Car - They Can Add Up!

    If you’re in the market for a new car, the asking price isn’t the only number you should be negotiating. The fees can cost you if you aren’t careful.
  7. Investing

    How The U.S. Government Formulates Monetary Policy

    Learn about the tools the Fed uses to influence interest rates and general economic conditions.
  8. Small Business

    Small Business Loan Vs Line of Credit: How They Differ

    Understand the differences between a small business loan and a line of credit, and learn some of the most appropriate uses for each form of financing.
  9. Investing

    The Foreign Exchange Interbank Market

    Can your forex broker offer you the most competitive pricing? Learn how the market's biggest players affect you.
  10. Personal Finance

    What is a Financial Institution?

    A financial institution is in business to, among other things, accept deposits, make loans, exchange currencies, and broker investment securities.
RELATED FAQS
  1. What is the primary use of reverse repurchase agreements?

    Discover how the Federal Reserve utilizes reverse purchase agreements for the primary purpose of offsetting temporary shifts ... Read Answer >>
  2. What are the typical requirements to qualify for closed end credit?

    Learn what closed-end credit is, and the various requirements that borrowers must meet in order to obtain a closed-end credit ... Read Answer >>
  3. Who trades in primary and secondary capital markets?

    Understand how primary and secondary markets function in the trade of financial securities between investors, and learn how ... Read Answer >>
  4. What is the average range for the price-to-earnings ratio in the electronics sector?

    Understand the difference between the primary market and the secondary market, and learn which investors are able to participate ... Read Answer >>
  5. What securities does the primary market deal with?

    Find out what kinds of securities are traded on the primary market, including who can participate in trading and the basics ... Read Answer >>
  6. What are the differences between installment sales and credit sales?

    Determine the differences between credit sales and installment sales, which businesses often offer their customers for deferred ... Read Answer >>
Hot Definitions
  1. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  2. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  3. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  4. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  5. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  6. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
Trading Center