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TIMELINE: Fed actions to boost liquidity

CHICAGO (Reuters) - The Federal Reserve said on Tuesday it will start buying mortgage-backed securities issued by three mortgage agencies in early January.

The agency MBS program, was first announced by the Fed in November with a planned implementation date before year-end.

It is just one of a series of unconventional measures aimed at smashing through a credit-market logjam and pulling the U.S. economy out of recession.

The Fed said it had selected investment managers BlackRock Inc., Goldman Sachs Asset Management, PIMCO and Wellington Management to implement the program, which will buy MBS issued by Fannie Mae, Freddie Mac and Ginnie Mae.

Following is a chronology of the Fed’s actions to counter a global credit crisis sparked by the collapse of the U.S. housing market and to support for the economy as its benchmark lending rates have sunk toward zero.


August 10: 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.


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

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.

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

March 16: Fed cuts discount rate and announces Primary Dealer Credit Facility (PDCF).

March 24: Fed takes over Bear Stearns assets valued at $30 billion. JPMorgan pays first $1 billion of loss.

July 13: Fed authorizes Fannie Mae and Freddie Mac to borrow from discount window.

July 30: Fed extends the PDCF and TSLF through January 30. It introduces 84-day TAF loans.

September 14: Fed expands collateral accepted for emergency loans, allowing equities for the first time ever under PDCF.

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 foreign swaps to $247 billion.

September 19: Fed opens discount window to fund purchases of asset-backed commercial paper from money market mutual funds.

September 21: Fed approves applications of Goldman Sachs and Morgan Stanley to become bank holding companies.

September 24: Fed establishes swaps with Australia, Denmark, Norway and Sweden.

September 29: Fed increases swaps by $330 billion to $620 billion and extends them through April 30, 2009.

Oct 6: Fed said it would begin paying interest on required and excess reserve balances that banks hold with the Fed.

Oct 6: Fed substantially increases TAF to $150 billion for both the 28- and 84-day auctions.

October 7: Fed creates a Commercial Paper Funding Facility (CPFF) to backstop U.S. issuers of commercial paper.

October 8: Fed cuts its key federal funds lending rate by a half percentage point to 1.5 percent in a coordinated move with other central banks in Europe and Asia.

October 13: Fed again expands its currency swaps with the Bank of England, the European Central Bank and Swiss National Bank.

October 14: Fed names Pacific Investment Management Co as the CPFF asset manager.

November 10: The Fed and Treasury sweeten terms of aid to AIG, taking preferred stock and reducing loan margin and lending fees.

November 25: The Fed announces a $500 billion program to buy the direct obligations of housing-related government sponsored enterprises.

November 25: The Fed, with the backing of the Treasury, also announces the Term Asset-Backed Securities Loan Facility (TALF), an $200 billion lending facility to support the market for consumer debt.

December 2: The Fed extends three of its liquidity facilities through April 30 from Jan 30: the Primary Dealer Credit Facility, Asset-Backed Commercial Paper Money Market Fund Liquidity Facility, and the Term Securities Lending Facility.

December 16: The Fed establishes a target range for the federal funds rate of zero to 0.25 percent, and says it will focus on open market operations and other measures to sustain the bank’s balance sheet at a high level. The Fed says it will consider buying longer-term Treasury securities.

December 19: The Fed issues revised terms for its loan facility for asset-backed securities (TALF), including an extension of loan maturity from one to three years and the addition of eligible asset-backed securities as collateral.

December 30: The Fed names PIMCO, Goldman Sachs Asset Management, BlackRock Inc and Wellington Management Co to implement its MBS buying program starting in early January.