Fed Extends Emergency Lending Programs Until Jan. 30 (Update1) By Scott Lanman July 30 (Bloomberg) -- The Federal Reserve extended two emergency lending programs to Wall Street firms until Jan. 30, 2009, ``in light of continued fragile circumstances in financial markets,'' the central bank said today. The Primary Dealer Credit Facility for direct loans to securities firms and the Term Securities Lending Facility for loans of Treasuries, both begun in March, ``would be withdrawn should the board determine that conditions in financial markets are no longer unusual and exigent,'' the Fed said in a statement. Chairman Ben S. Bernanke flagged the likelihood of the extension in a July 8 speech, saying the Fed is ``strongly committed'' to financial stability. The programs, representing a provision of Fed credit to nonbanks unprecedented since the Great Depression, were introduced to counter financial-market turmoil amid the near-collapse of Bear Stearns Cos. The Fed will start auctions of options of as much as $50 billion in the TSLF on top of the $200 billion program, which loans Treasuries to securities firms in exchange for asset-backed securities and other collateral. The central bank also will start selling 84-day loans to commercial banks under the Term Auction Facility beginning next month, in addition to the sales of 28-day loans that have occurred since the program began in December. The biweekly sales will alternate between auctions of $75 billion in 28-day loans, and $25 billion in 84-day loans. Lend to Nonbanks The Fed started the lending programs for investment banks under its authority to lend to nonbanks in ``unusual and exigent circumstances.'' Officials said at the time the Primary Dealer Credit Facility, which provides direct loans, would last for ``at least'' six months. The central bank had not previously given an end date for the TSLF. The PDCF has shown a zero balance for four straight weeks. The loans, once as high as $37 billion, fell to zero after the Fed took on a portfolio of assets in June as part of a March agreement to ease Bear Stearns's acquisition by JPMorgan Chase & Co. New York Fed President Timothy Geithner said last week that the PDCF and TSLF are still needed, citing ``exceptional'' tensions in financial markets. ``I don't think you can really judge the value today to the firms themselves, or the people that fund them, from looking at use day-by-day,'' Geithner told House lawmakers at a hearing in Washington. The Fed provides loans to commercial banks of as long as 90 days through the traditional discount window, which carries an interest rate of 2.25 percent, a quarter-point higher than the Fed's benchmark rate. Lending rose to a record daily average of $16.4 billion in the week ended July 24. In a related move, the European Central Bank and Swiss National Bank are also extending their operations to include auctions of 84-day funds, the Fed said in a press release. To contact the reporter on this story: Scott Lanman in Washington at email@example.com Last Updated: July 30, 2008 09:10 EDT ==== When did all this happen? 84 day loans to investment banks? $50 billion increase in term facility lending? Did all this happen today?