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Investment Banking Discount Window Will Remain Open Until 2009, At Least

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As expected, the Federal Reserve is extending the broker-dealer discount window. The special borrowing facility which was launched following the collapse of Bear Stearns was scheduled to terminate in September. Now the Fed says it will stay open until January 30, 2009. The discount window has been cited by folks like Pimco's Bill Gross as the reason why he remains confident that Lehman, among other investment banks, cannot fail.
The Fed also said it will extend the term lending facility that has provided additional liquidity to commercial banks. What's more, they added a longer term borrowing facility, allowing banks to borrow for up to 84 days. Previously, banks borrowing under the facility were limited to 28 day terms.