Another move by the the Fed to boost liquidity in credit markets. It will be interesting to see the details of how this play will be structured.
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Fed to Lend $200 Billion, Take on Mortgage Securities (Update1)
2008-03-11 08:51 (New York) (Bloomberg)

By Scott Lanman
March 11 (Bloomberg) -- The Federal Reserve plans to lend
up to $200 billion of Treasury securities in exchange for debt
including private mortgage-backed securities that have slumped
in value as homeowners defaulted on their payments.
The Fed set up a new tool, the Term Securities Lending
Facility, to lend Treasuries to primary dealers for 28-day
periods, through weekly auctions. The Fed also said in a
statement in Washington that it's increasing the amount of
dollars available to European central banks through swap lines.
Today's steps are the latest in Chairman Ben S. Bernanke's
effort to alleviate increasing strains in financial markets that
are curtailing credit available to homeowners and companies. The
Fed last week said it will make up to $200 billion available to
banks through other tools to help boost liquidity.
The auctions of Treasuries, which will begin March 27, may
be secured by collateral including agency and private
residential mortgage-backed securities, the Fed said. The
central bank ``will consult with primary dealers on technical
design features'' of the new tool.
The Federal Open Market Committee authorized increasing
currency swap lines with the European Central Bank and Swiss
National Bank to $30 billion and $6 billion, respectively,
increasing the ECB's line by $10 billion and the Swiss line by
$2 billion. The Fed extended the swaps through Sept. 30.
The FOMC's next regular meeting is scheduled for March 18.

--Editors: Chris Anstey, Mark Rohner

To contact the reporter on this story:
Scott Lanman in Washington at +1-202-624-1934 or
slanman@bloomberg.net

To contact the editor responsible for this story:
Chris Anstey at +1-202-624-1972 or canstey@bloomberg.net