The problems in credit markets and increasing concerns about the state of the economy caused equity prices to swing sharply and decline notably. Policymakers here and in other countries have taken a series of extraordinary actions in recent weeks to restore market functioning and improve investor confidence, with the aim ultimately to increase the availability of credit and the value of savings.
The Federal Reserve has continued to address ongoing problems in interbank funding markets by expanding its existing lending facilities, and recently increased the quantity of term funds it auctions to banks and accommodated greater demand for funds from banks and primary dealers. We also increased our currency swap lines with foreign central banks.