March 12, 2008
Fostering the Functioning of Financial Markets
FRB Press Release, March 11, 2008
“The Federal Reserve announced today an expansion of its securities lending program. Under this new Term Securities Lending Facility (TSLF), the Federal Reserve will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days (rather than overnight, as in the existing program) by a pledge of other securities, including federal agency debt, federal agency residential-mortgage-backed securities (MBS), and non-agency AAA/Aaa-rated private-label residential MBS. The TSLF is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally.”
I fear they may ultimately fail to foster the functioning. :)
March 12th, 2008 at 10:57 pm
Chairman,
the FED acts as a market maker of last resort in order to provide liquidity. Anyway, the market rules and the FED follows.
Cheers,
Markus
March 13th, 2008 at 10:52 am
Markus: Having read the Federal Reserve Kids Page, I’m familiar with their main responsibilities.
March 13th, 2008 at 2:11 pm
Great page, isn’t it. ;-) But beeing a market maker where there is no more market is a special job, I guess, and should not be included in the Fed kids page.
Cheers,
Markus