Fed help extended

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The Independent Online

The Federal Reserve has extended its emergency support to Wall Street investment banks for a further six months – a move that helped send stocks initially higher but also underlined how the central bank fears the credit crisis in financial markets could yet be far from over.

In the most important of a package of measures, securities firms will be able to use the Primary Dealer Credit Facility (PCDF), the special borrowing window set up for them after the Bear Stearns collapse in March, until 30 January next year. The facility was originally scheduled to last until mid-September. It will now only be removed when "markets are no longer unusual and exigent," in the words of the central bank.

Another facility – the Term Limits Securities Lending facility allowing investment firms to temporarily swap risky mortgage-backed investments for Treasury securities – is also being extended until 30 January.

Commercial banks will also be able to borrow from a $150bn facility for longer periods, by bidding on 84-day cash loans.