(Recasts, adds background)
NEW YORK Nov 19 The U.S. Federal Reserve's
balance sheet swelled in the latest week to the biggest in
almost a year on increases in agency and mortgage-backed
securities holdings, Fed data showed on Thursday.
The Fed's balance sheet liabilities -- a broad gauge of its
lending to the financial system -- expanded to $2.192 trillion
on Wednesday from $2.117 trillion a week ago.
That was the highest since the $2.248 trillion level of
Dec. 31, 2008 but below the record $2.295 trillion set on Dec.
The Fed's balance sheet has more than doubled due to its
massive financing aimed to help the financial system and the
overall economy in the aftermath of last year's credit crisis.
The U.S. central bank took unprecedented steps, including
purchases of government and mortgage-related securities.
The Fed's holding of mortgage-backed securities increased
to $847.04 billion on Wednesday from $775.57 billion a week
earlier, while its agency debt ownership climbed to $153.05
billion from $149.67 billion.
The Fed has said it will buy $1.25 trillion worth of MBS
and $175 billion in bonds issued by Fannie Mae FNM.N, Freddie
Mac FRE.N and the Federal Home Loan Bank System. These
purchases are cornerstones of its quantitative easing efforts
aimed at holding down mortgage costs and energizing the
battered housing industry.
The U.S. central bank's other financing activities were
mixed compared with a week ago.
Overnight direct loans to banks via the Fed's discount
window averaged $108.25 billion per day in the latest week,
compared with $108.22 billion a day in the prior week.
Primary credit borrowings averaged $19.79 billion in the
week ended Nov 18, down $22.61 billion the previous week.
The Fed's liquidity swap lines with foreign central banks
to provide dollars averaged $28.28 billion per day in the
latest week, down from $29.09 billion per day in the prior
week's average, according to Fed data.
The Fed's Commercial Paper Funding Facility assets totaled
$15.04 billion on Wednesday, up from the prior week's $14.30
The central bank's TALF LLC, a vehicle created in
connection with its Term Asset-Backed Securities Loan Facility
(TALF), was worth $231 million on Wednesday.
The TALF program aims to jump-start the securitization that
was battered by last year's credit crisis. TALF was worth $43.6
billion on Wednesday, compared with $43.84 billion a week ago.
TALF LLC buys asset-backed securities created from loans
made by TALF. This finance vehicle is funded by fees and income
earned from its investments.
(Reporting by Richard Leong; Editing by Dan Grebler)