Tuesday, February 3, 2009

Fed extends special lending programs

The U.S. Federal Reserve extended liquidity facilities for domestic financial institutions and currency swap lines with 13 central banks on Tuesday to keep money flowing in a banking system shattered by the worst financial crisis since the Great Depression.

"Continuing substantial strains in many financial markets" made the actions necessary, the Fed said in a statement.

The Fed said it would extend, through Oct. 30, facilities providing loans and liquidity to the commercial paper and money markets. The U.S. central bank is also keeping open through that date facilities providing loans and Treasuries to primary dealers.

The Fed further said it is extending currency swap lines with Australia, Brazil, Canada, Denmark, England, the euro zone, South Korea, Mexico, New Zealand, Norway, Singapore, Sweden and Switzerland. Japan will consider the extension at its next policy meeting, the Fed said.

The liquidity facilities - the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF), the Commercial Paper Funding Facility (CPFF), the Money Market Investor Funding Facility (MMIFF), the Primary Dealer Credit Facility (PDCF) and the Term Securities Lending Facility (TSLF) - and the swap lines had been set to expire on April 30.

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