Wednesday, March 12, 2008

Mar 12, 2008

In an effort to provide liquidity to cash-strapped financial institutions, the Federal Reserve will lend up to $200 billion of treasury securities to bond dealers in exchange for collateral such as mortgage-backed securities.The securities will be made available through an auction process. Auctions will be held on a weekly basis, beginning on March 27.

The announcement pushed markets to their biggest one-day percentage gain since 2003.

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