Federal Reserve (Fed) announced that it will reduce the amount of funds which will be offered to banks at two auctions next August, the program of short-term financing of banks (term auction facility, TAF).
In late June, the Fed has already cut the funds offered by banks through this mechanism, up to $ 125 billion from the previous $ 150 billion for each auction, this amount is now reduced to $ 100 billion
Fed said that the decrease in the volume of funds offered at the auctions will continue and further - to the extent of improvement in the credit market.
Program TAF, through which the proposed three-and one-credit, became the first reactions of the Fed at the beginning of the crisis in the credit market and was launched as a mechanism to stimulate lending in late 2007.
Recently, the volume of lending to commercial banks in the Federal Reserve reduced and returned to the level of August - early September last year, has not yet started when the acute phase of the financial crisis. In particular, in July last TAF auction was ssuzheno banks, only 40% of the proposed funds. In some cases, because of the low interest rate of demand at auctions fell to the lowest of 0.25%.
Fed, in addition to TAF, also supports a program to support lending to consumers and companies (Term asset-backed securities loan facility, TALF).
The Fed uses three levers to stimulate the economy: it is the base rate, which is now virtually zero, the program providing emergency liquidity (including short-term credit banks and the supply of dollars in foreign CB), the purchase of secured mortgage debt and gosobligatsy aimed at reducing long-term interest rates.
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