In 2008 the Fed lent to securities dealers, not just banks, to stop a repo run.

Primary dealers fund their bond inventories largely with repurchase agreements, so when repo lenders pulled back after the near-collapse of Bear Stearns, dealers faced having to dump securities into a falling market.

On March 16, 2008 the Fed announced the Primary Dealer Credit Facility, making discount-window style loans to primary dealers against a broad range of investment-grade debt, at the same rate the discount window charged. In the same release it trimmed the primary credit rate and extended loan maturities.

The creative move was extending the lender-of-last-resort function beyond insured banks to the securities dealers that had no window at all, and taking collateral the repo market would not.

Extend the lender of last resort to nonbank dealers

Dealers had no bank-style lender of last resort

Repo funding collapsed, forcing forced sales of securities

Broad collateral let illiquid assets serve as pledge

The same-day standing access prevented fire-sale spirals

A lender of last resort that only serves banks leaves the shadow-banking core of the market exposed; widen the door and the collateral, not just the price.

The PDCF was part of a suite of facilities (TAF, TSLF, PDCF) that together stabilized the funding markets, and it was later broadened to accept more collateral. It made the Fed the de facto backstop for the dealer community, a precedent that shaped later crisis lending.