Fed to free up $200 billion in loans
Published: March 11, 2008 at 11:13 AM
WASHINGTON, March 11 (UPI) -- The U.S. Federal Reserve announced Tuesday it will lend $200 billion in Treasury securities to help pump dollars into the U.S. economy.
The securities will be offered to bond dealers on 28-day terms and will be auctioned on a weekly basis starting March 27, the Fed said.
The 28-day term is a departure from the standard, overnight format.
The securities will be backed by a pledge of federal agency debt, federal agency residential mortgage backed securities and non-agency AAA/Aaaa-rated private label residential mortgage backed securities.
The offer, similar to the raised limits on securities auction limits announced Friday, is intended "to promote liquidity in the financial markets," the Fed said.
On Friday, the Fed increased the size of the Term Auction Facility to $100 billion and initiated repurchase transactions to add another $100 billion to the economy.
Tuesday's announced actions included an increase of currency swaps to $30 billion with the European Central Bank, from $10 billion, and to $6 billion with the Swiss National Bank from $2 billion. The agreements allow foreign central banks to borrow from the Fed and increase their lending capacity in their home country.
The securities will be offered to bond dealers on 28-day terms and will be auctioned on a weekly basis starting March 27, the Fed said.
The 28-day term is a departure from the standard, overnight format.
The securities will be backed by a pledge of federal agency debt, federal agency residential mortgage backed securities and non-agency AAA/Aaaa-rated private label residential mortgage backed securities.
The offer, similar to the raised limits on securities auction limits announced Friday, is intended "to promote liquidity in the financial markets," the Fed said.
On Friday, the Fed increased the size of the Term Auction Facility to $100 billion and initiated repurchase transactions to add another $100 billion to the economy.
Tuesday's announced actions included an increase of currency swaps to $30 billion with the European Central Bank, from $10 billion, and to $6 billion with the Swiss National Bank from $2 billion. The agreements allow foreign central banks to borrow from the Fed and increase their lending capacity in their home country.
© 2008 United Press International. All Rights Reserved.
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This material may not be reproduced, redistributed, or manipulated in any form.
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