I am reading a 1992 report by the Federal Reserve, the Treasury Department, and the SEC on the government securities market. The report was issued primarily as the result of the Solomon Brothers market manipulation in 1991. On page B-7, the report talks about how the Treasury can handle a “squeeze” in the market:
There are a number of methods which the Treasury could use to supply the market more of a given security, including (1) an auction, (2) an offering of additional supply in increments through the Open Market Desk of the FRBNY (a “tap”), (3) an issuance window, and (4) an offer to lend securities to government securities dealers using the FRBNY as fiscal agent.
For the 2008 financial crisis, #1 (here, here, here, and here) and #4 (here) were definitely used to ease liquidity/supply constrains in the Treasury market. I do not recall whether #2 and #3 were used.
I am working on a paper that will provide a more in depth look at the operations of the Treasury market over the financial crisis in 2008. Some googling leads me back to this 20-year old report. I am surprise that the issues then and the issues now have changed very little over the past 20 years.
Reference: Joint Report on the Government Securities Market, January 1992 [Treasury Department]