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.
To alleviate pressures on money market mutual funds and commercial paper issuers, we implemented several important temporary facilities, including one to provide financing to banks to purchase highquality asset-backed commercial paper from money funds, and another to provide a backstop to commercial paper markets by purchasing highly rated commercial paper directly from businesses at a term of three months.