Liquidity facility - Financial definition
Concise definition of the term liquidity facility
A facility that can be drawn upon by certain eligible entities.
Comprehensive definition of the term liquidity facility
In some cases, the facility can be used automatically at the initiative of the account holder, while in other cases the liquidity provider may decide explicitly on each single request.
The loans typically take the form of either advances or overdrafts on an account holder's current account, which is typically secured by a pledge of securities, of repos or of traditional rediscounting of bills.