New York Times article by Edmund L. Andrews

WASHINGTON — Impelled to take extraordinary measures for the second time in less than a week, the Federal Reserve moved on Tuesday to subdue the deepening crisis in credit markets by stepping up as lender of last resort.

In an action that sent stock prices soaring, the central bank offered to let the biggest investment banks on Wall Street borrow up to $200 billion in Treasury securities in exchange for hard-to-sell mortgage-backed securities as collateral. And the Fed made clear that it was prepared to do more as needed.

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