The US government is doing its best to revive confidence in the US financial system. On the heels of a tentative agreement for the bailout effort being discussed in Washington, the Federal Reserve has taken the opportunity to show there is more than one approach to stabalize financial and credit markets. This morning, the central bank announced it would increase its supply of 84-day TAF credit to $225 billion and that it was extending the auctions through April 30th. The standard 28-day infusions would be kept at $75 billion officials said. Nonetheless, the total injection of currency swaps into the market is now at a staggering $620 billion of short-term liquidity. Furthermore, the Fed would reaffirm its swap lines with other central banks. The Bank of Canada's line is $30 billion, the SNB has a line for $30 billion, the BoJ can access $120 billion, and the BoE's access was doubled to $80 billion, among others.
