from the New York Fed
The Federal Reserve resorted to statutory authorities that had lain dormant for more than seven decades when, in 2008, it took steps to bolster a financial system on the brink of collapse.
The Fed had been granted these powers in 1932 through passage of the Emergency Relief and Construction Act, which added Section 13(3) to the Federal Reserve Act. Section 13(3) as amended gave Federal Reserve Banks the authority to “discount” for any “individual, partnership, or corporation” notes “indorsed or otherwise secured to the satisfaction of the Federal Reserve Bank[s],” subject to a finding by the Federal Reserve Board (now the Board of Governors of the Federal Reserve System) of “unusual and exigent circumstances.”
In 2008, at the height of the financial crisis, the Federal Reserve System used its 13(3) authority to provide loans in support of a variety of markets and market participants, including broker-dealers, commercial paper issuers, and money market mutual funds. The Board of Governors created six emergency facilities, and authorized direct loans to three special purpose vehicles, four broker-dealers, and an insurance company (see Table 1). Federal Reserve lending under the section peaked at more than $700 billion in late 2008, as shown in Chart 1.
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Source
https://www.newyorkfed.org/medialibrary/media/research/ epr/2018/epr_2018_political-origins_sastry.pdf
