Fed funnels billions into global markets

The Federal Reserve announced today an additional injection of cash into the global financial system to help combat the credit crisis.

The Fed is increasing its existing currency swaps with foreign central banks by $330 billion to $620 billion.

Participating central banks include the European Central Bank, the Swiss National Bank, and the Banks of Canada, England, Japan, Norway, Sweden, Denmark and Australia.

The Fed also said that it is boosting its own auction facility for U.S. banking institutions to $75 billion per auction from $25 billion starting Oct. 6, with two additional auctions totaling $150 billion to be conducted in November.

“These steps are being undertaken to mitigate pressures evident in the term funding markets both in the United States and abroad,” the Fed said in a statement. “We will continue to adapt these liquidity facilities as necessary and will keep them in place as long as circumstances require.”

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