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The central bank said that its so-called term auction facility, which accepts financial instruments such as mortgage-backed securities as collateral, will be doubled immediately to $300 billion. The total amount available to banks will rise to $600 billion under the moves announced Monday.
In addition, the Fed signaled it could increase the amount available through those loans to $900 billion by the end of the year, increasing the amount the Fed will loan through the program by $750 billion above its previous limit.
Coupled with the Treasury Department's plan, the two major institutional authorities of American banking and finance pieced together over $1.4 trillion in lending programs in just a few weeks.
Markets in Europe, Russia, Brazil, Indonesia and the Middle East were all down on Monday, a domino effect of the poor performance in U.S. markets. Stock markets in emerging economies experienced their worst day in 21 years, and Russia and Brazil both closed their markets down early to halt the rapid decline.