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collegio dei patafisici
US stocks rallied as the Fed ramped up its liquidity support operations again on Wednesday in efforts to reduce money market strains and pre-empt the possibility of funding crises at the year-end or at other stress points.
The Fed said it would offer three-month cash loans to banks and create a new options auction facility under which dealers could swap illiquid securities for Treasuries over periods of likely funding stress.
It also said it would give investment banks and other primary dealers extended access to emergency cash and loans of Treasury securities until Jan 30, “in light of continued fragile circumstances in financial markets”.
The ECB and Swiss National Bank will also offer three-month dollar loans through an offshore facility set up with the Fed.
The move marks an important concession by the Fed, which had resisted pressure from banks to extend the maximum term of its operations from one month to three.
The Fed said it would offer three-month cash loans to banks and create a new options auction facility under which dealers could swap illiquid securities for Treasuries over periods of likely funding stress.
It also said it would give investment banks and other primary dealers extended access to emergency cash and loans of Treasury securities until Jan 30, “in light of continued fragile circumstances in financial markets”.
The ECB and Swiss National Bank will also offer three-month dollar loans through an offshore facility set up with the Fed.
The move marks an important concession by the Fed, which had resisted pressure from banks to extend the maximum term of its operations from one month to three.
