Fed Expands Securities-Lending Program, Futures Rise
The Federal Reserve will hold auctions to lend as much as $200 billion in Treasury securities and increase swap lines with two foreign central banks to try to ease renewed turmoil in credit markets.
The Fed said in a statement it is establishing a new Term Securities Lending Facility to, through weekly auctions, lend as much as $200 billion of Treasuries to primary dealers for 28 days, instead of overnight as it currently does. The loans may be secured by collateral including agency and private mortgage-backed securities, the Fed said.
The Federal Open Market Committee also authorized increasing currency swap lines with the European Central Bank and Swiss National Bank to $30 billion and $6 billion, respectively, increasing the ECB's line by $10 billion and the Swiss line by $2 billion.
Published on March 11, 2008
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