TIMELINE: Fed actions to boost liquidity

WASHINGTON (Reuters) - The U.S. Federal Reserve on Wednesday announced coordinated rate cuts with other central banks in Europe to stem fallout from the financial crisis. The move followed the creation of a commercial paper funding facility on Tuesday to keep credit markets working.

The actions were the latest in a series of extraordinary steps by the Fed dating to August 2007 aimed at keeping strained credit markets from freezing up entirely.

Following is a chronology of the Fed's actions:

August 10, 2007: Fed notes banks are experiencing unusual funding needs and says it will provide funds as needed.

August 17: Fed cuts discount rate; says it will act as needed to safeguard economy from financial market disruptions.

November 26: Fed promises more than the usual year-end liquidity and says it will lift limits on how much can be lent to any one bank.

December 12: Fed establishes Term Auction Facility (TAF) to provide funds over longer period to a wider range of banks. It also sets up foreign exchange swap lines with the European Central Bank and Swiss National Bank for up to six months, providing up to $20 billion for the ECB and $4 billion for the SNB.

January 3, 2008: Fed raises TAF auction amounts to $30 billion from $20 billion for each of the two auctions in January.

February 1: Fed says to continue TAF auctions in February.

February 29: Fed sets two TAF auctions of $30 billion each in March and says intends to conduct auctions for as long as necessary.

March 7: Fed increases size of TAF auctions to $50 billion and starts a series of 28-day repurchase transactions with primary dealers expected to total another $100 billion.

March 11: Fed says to accept broader range of collateral in new program for primary dealers, the Term Securities Lending Facility (TSLF), to lend up to $200 billion for 28 days. It also increases swap lines with the ECB and the SNB to up to $30 billion and $6 billion, respectively; extends them through September 30.

March 14: Fed says authorized JPMorgan Chase to borrow at discount window for Bear Stearns.

March 16: Fed cuts discount rate and announces new program to provide credit to primary dealers, the Primary Dealer Credit Facility (PDCF). PDCF to extend credit against broad range of investment-grade debt securities. It also increases maximum term of discount rate loans to 90 days from 30 days. Actions are taken in concert with decision to approve special financing to facilitate the purchase of Bear Stearns by JPMorgan Chase.

March 24: Fed details role in amended JPMorgan planned purchase of Bear Stearns. It says it will assume control of a portfolio of Bear Stearns assets valued at $30 billion. Any profit will accrue to Fed; JPMorgan will bear first $1 billion of any losses.

April 9: Fed says considering plan to have Treasury borrow in excess of its needs and deposit surplus at Fed. It says also considering whether to issue debt under its own name and whether to seek authority to immediately begin paying interest on commercial bank reserves.

May 13: Fed asks Congress to grant it immediate authority to pay interest on reserves.

July 13: Fed authorizes Fannie Mae and Freddie Mac to borrow from discount window. It also agrees to take on a consultative role in setting capital requirements and financial safety and soundness standards for the companies.

July 30: Fed extends the PDCF and TSLF through January 30. It introduces 84-day TAF loans to complement existing 28-day loans. It increases swap line with the ECB to $55 billion from $50 billion, and extends swaps with both ECB and SNB through January 30, 2009.

September 14: Fed expands collateral accepted for emergency loans, allowing equities for the first time ever under its PDCF and expanding TSLF collateral to include all investment-grade debt securities. The Fed also expands TSLF program to $200 billion from $175 billion and announces more frequent auctions. Fed agrees temporarily to allow insured depository institutions to extend liquid funds to broker affiliates for assets that would normally be accepted in tri-party repurchase agreements. This provision expires January 30, 2009.

September 16: Fed agrees to lend up to $85 billion to American International Group.

September 17: Treasury says to begin auctions to raise funds for Fed.

September 18: Fed expands swaps to $247 billion, increasing line with the ECB to $110 billion and line with SNB to $27 billion, while opening new lines with Bank of Japan for $60 billion, Bank of England for $40 billion, and Bank of Canada for $10 billion. Swaps authorized through January 3O, 2009.

September 19: Fed opens discount window to financial institutions to fund purchases of asset-backed commercial paper from money market mutual funds. It also says it will buy short-term debt obligations issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks from primary dealers.

September 21: Fed approves applications of Goldman Sachs and Morgan Stanley to become bank holding companies, pending five-day antitrust waiting period, and authorizes extension of credit to their broker-dealer subsidiaries on same terms as discount window or PDCF. It makes similar collateral arrangement available to Merrill Lynch and authorizes extension of credit to London-based broker-dealer subsidiaries of all three investment banks against same collateral that is accepted under the PDCF.

September 22: Fed says Goldman Sachs' and Morgan Stanley's bank holding company applications may be consummated immediately.

September 24: Fed establishes swaps with Australia, Denmark, Norway and Sweden, taking total to $277 billion. Swaps provide up to $10 billion for Australia and Sweden, and $5 billion for Denmark and Norway. They are authorized through January 30, 2009.

September 26: Fed expands swaps with ECB by $10 billion to $120 billion and with SNB by $3 billion to $30 billion. Total swaps now $290 billion. All swaps would expire January 30, 2009.

September 29: Fed increases swaps by $330 billion to $620 billion and extends them through April 30, 2009. It expands size of 84-day TAF auctions to $75 billion per auction from $25 billion and establishes new forward TAF auction program totaling $150 billion. Swaps now stand at $30 billion for the BOC, $80 billion for the BoE, $120 billion for the BOJ, $15 billion for Denmark, $240 billion for the ECB, $15 billion for Norway, $30 billion for the Reserve Bank of Australia, $30 billion for Sweden and $60 billion for the SNB.

Oct 6: Fed said it would begin paying interest on reserve balances that banks are required to hold with the Fed. It said this would help it ease credit market conditions while keeping the federal funds rate close to its target.

Oct 6: Fed substantially increased Term Auction Facility to $150 billion for both the 28- and 84-day auctions. The increases will eventually lift outstanding amounts under the TAF to $600 billion. It also increased the two forward TAF auctions to $150 billion each, potentially meaning that $900 billion of TAF credit will be outstanding at year-end.

Oct 6: Fed Board exempts banks from limits on transactions with affiliates that will allow them to buy assets from affiliated money market mutual trust funds under certain circumstances.

October 7: Fed creates a Commercial Paper Funding Facility to provide a backstop for U.S. issuers of commercial paper. It will purchase 3-month unsecured and asset-backed commercial paper from eligible issuers via a special purpose vehicle. The Fed has not said how large the facility will grow. It noted that there was $1.3 trillion of commercial paper eligible, but said it did not expect to purchase nearly that amount.