Fed Extends Emergency Borrowing Program

New York Times (07/31/08) P. C12
The Federal Reserve is taking steps to ease a tight credit market, including by extending its emergency borrowing program to Wall Street firms. The program, through which investment houses can turn to the central bank as a quick funding source, will be available through the end of January instead of an earlier expiration date in mid-September. Another program, under which investment firms can temporarily swap such risky investments as mortgage-backed securities for safer Treasury securities, will also let commercial banks bid on cash loans that last longer--for 84 days--than the 28-day loans currently available. Fed policymakers say they are taking these steps "in light of continued fragile circumstances in financial markets."