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Federal Reserve extends liquidity programmes

The Federal Reserve has extended the deadline for its existing liquidity programmes by six months, to October 30, in a sign of continuing strain on financial markets.

    • <p>Joel Clark</p>
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The programmes include the Money Market Investor Funding Facility, a $540 billion fund created in October 2008 to relieve ailing money market funds; the Primary Dealer Credit Facility, which provides discount window loans to primary dealers; the Term Securities Lending Facility, under which the Federal Reserve Bank of New York auctions term loans of Treasury securities to primary dealers; the Commercial Paper Funding Facility, which provides a liquidity backstop to US issuers of commercial paper; and the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, which provides loans to depositary institutions to purchase asset-backed commercial paper and money market mutual funds.

The Fed has also extended its reciprocal currency arrangements (swap lines) with 13 other central banks until October 30 in an effort to address continuing pressure in US dollar funding markets.

The current expiration date for the Term Asset-Backed Securities Loan Facility (TALF), which supports the issuance of collateralised asset-backed securities, remains December 31. The Fed's other liquidity facilities, such as the Term Auction Facility, do not have a fixed expiry date.

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