WORLD> US Fed Move
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WORLD> US Fed Move
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Fed to auction more loans to banks in June
(Xinhua)
Updated: 2008-05-30 10:08 WASHINGTON -- The US Federal Reserve announced Thursday that the amount of money it will auction to commercial banks in June will be raised to $225 billion from $150 billion in May as part of its ongoing effort to ease credit crisis. The Fed said it will conduct three auctions through its Term Auction Facility (TAF) next months, with each one offering $75 billion in short-term cash loans. Banks can bid for a slice of the available funds. The new round of auctions will be conducted on June 2, June 16 and June 30. The US central bank has so far held 12 auctions, or twice a month, aimed at injecting more money into the banking system since mid-December 2007, when it established its TAF to deliver short-term funds to cash-strapped banks in hopes of keeping them lending. The new facility was developed as the Fed was trying to prevent the credit crunch from deteriorating. In a separate program, the Fed on Thursday auctioned $16.4 billion in safe Treasury securities to investment firms through its Term Securities Lending Facility (TSLF), another effort aimed at easing credit crunch. That auction drew bids less than the $25 billion being made available, which analysts say could be viewed as a sign of some improvement in credit conditions. By establishing the TSLF, which began March 27, the Fed temporarily allows investment firms to obtain emergency loans directly from the central bank, a privilege that only commercial banks had been granted. The US central bank is expected to focus more on loan and security auctions and other efforts to help banks and investment firms overcome any credit problems after having cut interest rates aggressively since last September. |
