FACTBOX-The Fed's evolving emergency liquidity toolkit

Nov 23 (Reuters) - The Federal Reserve is expected to leave
interest rates on hold at its current rock-bottom range of zero
to 0.25 percent range for an "extended period."

However, certain portions of its emergency lending programs
were constructed in such a way that they would automatically
wind down when no longer needed. Other facilities require
direct intervention by policymakers.

Last week, the central bank said it was reducing the
maximum maturity of loans from its discount window to 28 days
from 90 days in light of the improvement in financial markets.

A more stable backdrop also allowed the Fed late last month
to allow the expiry of an emergency provision that had
permitted banks to provide liquidity to broker affiliates.

TERM ASSET-BACKED SECURITIES LOAN FACILITY (TALF):

The TALF aims to revive securitization markets in the hope
of spurring consumer and small business lending, as well as to
commercial real estate.

The Fed has pledged to lend an initial $200 billion under
TALF, with the U.S. Treasury pitching in $20 billion to cover
credit risks. However, officials have said the program could
grow to $1 trillion. On Aug. 17 is was extended until March 31,
2010 for asset backed securities and legacy CMBS and on June
30, 2010 for new CMBS.

FX CURRENCY SWAP LINES WITH OTHER CENTRAL BANKS:

The Fed -- the U.S. central bank -- has set up currency
swap lines with 14 other central banks so they have U.S.
dollars to lend in their markets. On June 25 the Fed extended
the life of the arrangements by three months to Feb. 1, 2010.

DISCOUNT WINDOW:

The discount window is the Fed's traditional way of
providing liquidity to U.S. banks against collateral. When the
Fed cut its overnight interbank federal funds target rate to
between zero and 0.25 percent in December, it cut the rate on
loans from the discount window to 0.5 percent.

Historically, the discount window loans were made on an
overnight basis. When the financial crisis first struck in
August 2007, the Fed extended the maturity on discount window
loans to 30 days to help financial institutions which were
having trouble securing credit. It lengthened the maximum term
to 90 days in March last year in a further effort to combat the
credit crisis.

TREASURY PURCHASE PROGRAM:

In March the Fed said it would buy up to $300 billion of
Treasury securities over six months. It completed these
transactions last month.

MORTGAGE-BACKED SECURITIES PURCHASE PROGRAM:

The Fed in November 2008 said it would buy $100 billion in
the debt of government-sponsored enterprises Fannie Mae
FNM.P, Freddie Mac FRE.P and the Federal Home Loan banks --
and $500 billion in mortgage-based securities backed by Fannie
Mae, Freddie Mac and Ginnie Mae. In March the Fed expanded
these programs by $850 billion to a total of $1.45 trillion. As
of Aug. 13, the Fed had bought about $741.6 billion of agency
MBS, and $111.04 billion of agency debt as of Aug. 14.

SHORING UP MONEY MARKET MUTUAL FUNDS (AMLF):

The Fed in September 2008 said it would make discount
window loans to financial institutions to allow them to buy
asset-backed commercial paper from money market mutual funds.
On June 25 the Fed extended the program to Feb. 1, 2010, from
Oct. 30, 2009.

COMMERCIAL PAPER FUNDING FACILITY (CPFF):

The Fed in October 2008 said it would fund purchases of
highly rated, U.S.-dollar-denominated, three-month commercial
paper. Purchases will be made through a special purpose
vehicle. The CPFF was due to expire this October but was
extended to Feb. 1, 2010.

MONEY MARKET INVESTOR FUNDING FACILITIES (MMIFF):

The Fed in October 2008 announced a $600 billion facility
to help money markets to purchase certificates of deposits and
commercial paper. It expires at the end of October and the Fed
says it will not be extended because markets have improved.

PRIMARY DEALER CREDIT FACILITY (PDCF):

Traditionally, the Fed has lent only to insured depository
institutions through its discount window. However, on March 16,
2008 it launched a new facility for investment banks, marking
the first time since the Great Depression that it had lent to
non-depository institutions. The program has been extended four
times and is now due to run through Feb 1, 2010, even though it
is currently not being used.

TERM SECURITIES LENDING FACILITY (TSLF):

Under the $200 billion TSLF, the New York Fed conducts
weekly auctions of 28-day loans of Treasury securities to
primary dealers. It is due to end on Feb 1, 2010. The Fed also
auctions options on the TSLF to ease liquidity over
traditionally strained end of quarter periods, but on June 25
suspended these auctions due to weak demand.

TERM AUCTION FACILITY (TAF):

The Fed launched the Term Auction Facility in December 2007
to provide funds over a longer period to a wider range of
banks. After steadily enlarging the facility at first, the Fed
on June 25 cut the size of upcoming TAF auctions to $125
billion from $150 billion, effective July 13.

TERM REPURCHASE AGREEMENTS:

In March 2008, the Fed announced a series of 28-day
repurchase transactions for primary dealers, expected to add up
to $100 billion.

PAYING INTEREST ON RESERVES:

Congress authorized the Fed in October 2008 to begin paying
interest on reserves that banks hold at the central bank, which
can help the Fed expand its balance sheet without pushing down
interest rates.

OTHER TRADITIONAL TOOLS:

The Fed also provides liquidity through its traditional
open market operations and securities lending to primary
dealers. The loans of funds or Treasury securities are
typically overnight repurchase agreements against collateral of
Treasuries, agencies or agency MBS.
(Compiled by Reuters' Fed reporting team; Editing by Andrew
Hay)
((Washington economics newsdesk; Tel: +1-202-898-8310))