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The Federal Reserve announced Friday that it is increasing the amount of money available to banks through the new auction process it created to ease the nation's severe credit squeeze. The Fed again pledged to continue the auctions "for as long as necessary."
The Fed said that it will increase the amount offered at each of the next two auctions from $20 billion to $30 billion, a 50 percent jump. Those two auctions will be Jan. 14 and Jan. 28.
Chairman Ben Bernanke and his colleagues decided to try the auction approach because their efforts to inject funds into the banking system through direct loans to banks had not been as successful as hoped.
Banks were hesitant to borrow money directly from the Fed, using a process known as the Fed's discount window, for fear that it would carry a stigma that would raise doubts among investors about the soundness of institutions using the discount window.
Originally posted by St Udio
reply to post by marg6043
just a heads up for anyone astute enough to buy the 'financials' which look hopeless right now.
Abu Dhabi Investment Authority had good timing,” he said, noting that it took ADIA less than three weeks to seal its late November deal to invest $7.5bn in convertible securities in Citigroup.
The Fed said its holdings of Treasury and agency debt kept for overseas central banks rose $14.667 billion in the week ended December 26, to total $2.062 trillion.
Overseas central banks, particularly those in Asia, have been huge buyers of U.S. debt in recent years