May 2, 2008 (LPAC)--The Federal Reserve today announced a further expansion of its measures to support the bankrupt U.S. banking system. It will expand the amount it lends to depository institutions under its bi-weekly Term Auction Facility auctions by 50%, to $75 billion, raising the total amount available under the TAF program to $150 billion. This is the fifth increase in the TAF limits since the program was established in December, 2007, with a $20 million per auction, $40 billion total limit. The Fed has also increased the existing reciprocal currency agreements with the European Central Bank (ECB) and Swiss National Bank (SNB) for the second time, to $50 billion for the ECB and $12 billion for the SNB, from the initial amounts established in December of $20 billion and $4 billion, respectively, and extended these agreements through Jan. 30, 2009. The Fed also relaxed the collateral standards for a portion of its Term Securities Lending Facility (TSLF) to include AAA/Aaa-rated asset-backed securities. The TSLF, established in March, makes loans to the primary dealers, a group of 20 investment banks.

Taking into account the total of repo loans, TAF loans, discount window loans, loans to securities dealers and seasonal credit loans, the Fed had $442 billion in loans outstanding on April 30. The weekly average of loans outstanding has climbed steadily, from some $83 billion in December, to $99 billion in January, $111 billion in February, $191 billion in March, and $413 billion in April, as the Fed pours ever more money down the rathole.