I have read https://en.wikipedia.org/wiki/Term_auction_facility and https://www.investopedia.com/terms/t/term-auction-facility.asp

Under the program the Fed auctions collateralized loans with terms of 28 and 84 days to depository institutions that are "in generally sound financial condition" and "are expected to remain so over the terms of TAF loans." Eligible collateral is the same as that accepted for discount window loans and includes a wide range of financial assets.

Then how does it address the liquidity problem in 2007/2008? If banks have no money, how do they pay for those loans, and what do they use those loans for?


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