The Federal Reserve on Friday announced emergency measures to add $200 billion into the banking system in a bid to ease persistent liquidity strains that are leading to a global credit freeze.

The Fed said it would increase the size of its two term auctions of short-term funding to banks this month to $100 billion from the $60 billion previously announced. It also would start a series of term repurchase transactions with the primary dealers that trade securities directly with the Fed, expected to be worth a total of $100 billion.

The two measures are intended to “address heightened liquidity pressures in term funding markets,” the Fed said in a surprise announcement.

Related Articles

Federal Reserve will conduct two auctions of 28-day credit Term Auction

Federal Reserve will conduct two auctions of 28-day credit through its term auction facility in January

Federal Reserve and other central banks announce specific measures designed to address liquidity pressures in funding markets

Federal Reserve to Offer $50 Billion in Term Auction Facility

U.S. Federal Reserve to auction another $100 billion to banks in April

Posted: 03|7|08 at 9:40 pm. Filed under: News.