Saturday, December 20, 2008

Fed provides details of upcoming auctions

The Federal Reserve on Friday released a schedule of upcoming auctions that allow squeezed banks to obtain short-term cash loans to help them cope with the global credit crisis.

The Fed will conduct six auctions in the first three months of next year. Auctions conducted on Jan. 12, Feb. 9, and March 9 give banks the opportunity to obtain 28-day loans. Auctions conducted on Jan. 26, Feb. 23, and March 23 allow banks to get 84-day loans.

To ease the severe credit crunch, the Fed last December launched the program to give banks a new way to get short-term loans and help them over the credit hump. A lockup in lending between banks, and to businesses and consumers, has aggravated the economy's problems, throwing the country into a recession.

The Fed has been working closely with other central banks to coordinate the relief efforts. The Bank of England, Bank of Japan, European Central bank and Swiss National Bank also announced schedules for similar auctions.

But citing weakening demand, the ECB also said it would discontinue euro-dollar foreign exchange swaps at the end of January. The ECB added that if conditions warranted, the swaps could be resumed.

source : http://www.google.com/hostednews/ap/article/ALeqM5hHY9_2T5594LdVhBsC-c1nfqlkJgD955QCGG0