UPDATE 1-U.S. Fed balance sheet grows on more Treasuries

(Rewrites first paragraph, adds details)

NEW YORK Nov 12 (Reuters) - The U.S. Federal Reserve's balance sheet grew in the latest week as it amassed more Treasuries in an effort to stimulate investment and economic growth, Fed data released on Friday showed.

The balance sheet -- a broad gauge of Fed lending to the financial system -- rose to $2.295 trillion in the week ended Nov. 10 from $2.283 trillion the previous week.

The Fed's balance sheet is approaching its record peak of $2.333 trillion in May as it was about to end its initial program of bond purchases that involved $300 billion of Treasuries and $1.425 billion in mortgage-related securities.

On Friday, the U.S. central bank initiated the second round of quantitative easing, known as "QE2." It bought roughly $7 billion in government debt maturing in 4 to 5-1/2 years.

The QE2 program is worth about $600 billion in Treasury purchases over an eight-month period.

The Fed's QE2 purchases coincide with its use of proceeds from maturing mortgage securities in its portfolio, a move that started in August.

Since mid-August, it has purchased $75.8 billion in Treasury securities. [ID:nN20EDTABL]

The central bank's holding of U.S. government securities totaled $853.04 billion on Wednesday, up from $842.01 billion last week. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For balance sheet graphic: link.reuters.com/buf92k ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

The Fed's ownership of mortgage bonds guaranteed by Fannie Mae (FNMA.OB), Freddie Mac (FMCC.OB) and the Government National Mortgage Association (Ginnie Mae) held steady at $1.051 trillion.

The Fed's holdings of debt issued by Fannie, Freddie and the Federal Home Loan Bank system were unchanged from the previous week at $149.68 billion.

Meanwhile, there were renewed concerns this week over whether the debt troubles in Ireland would spread to the rest of Europe and even across the Atlantic.

However, the Fed's emergency lending slowed in the latest week. Its overnight direct loans to credit-worthy banks via its discount window averaged $13 million a day in the week ended Wednesday, below the $64 million daily pace the previous week.

(Reporting by Richard Leong; Editing by Padraic Cassidy)