With banks’ credit difficulties expanding rapidly, the Federal Reserve auctioned another $75 billion in 28-day credit to financial institutions through its Term Auction Facility.
The over-subscribed Monday offering received more than $90 billion in bids from 70 institutions, according to results announced today.
The Associated Press noted that the program was created last December to help commercial banks receive short-term loans, with an eye to easing the financial crisis. Because of the credit crunch, banks have been much more reluctant to lend to one another.
In the most recent auction, commercial banks paid an interest rate of 2.350 percent, according to the wire service.