The Federal Reserve plans to provide $60 billion to commercial banks, through an auction process, in an attempt to ease the current credit crisis.
In a statement on Friday, the Fed announced that it would continue holding the auctions, which began in December, every other week "for as long as necessary to address elevated pressures in short-term funding markets."
The process started with two auctions of $20 billion each. The amount was raised to $30 billion for January and will continue through February.
The next two auctions will be held on February 11 and February 25 with the Fed set to announce the size of the March auctions by February 29.
The minimum bid amount for the February auctions will be reduced from $10 million to $5 million to "facilitate participation by smaller institutions."
The Fed hopes the additional resources will prevent a severe credit squeeze from pushing the country into a recession.
|
