Jan. 4 (Bloomberg) -- The Federal Reserve will increase the size of two scheduled auctions of emergency loans by 50 percent to $30 billion as part of a global attempt by central bankers to restore faith in the money markets.
The Fed reiterated that it will continue the loan auctions, designed to increase the amount of cash available in the banking system, ``for as long as necessary,'' in a statement released today. The third and fourth auctions will be conducted on Jan. 14 and 28. The central bank will announce on Feb. 1 whether further auctions will be conducted.
Since the first of the auctions on Dec. 17, companies' cost to borrow in dollars for three months has fallen to the lowest in two years, suggesting central banks are succeeding in spurring bank lending.
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