The new Federal Reserve credit auction facility is intended to tackle head-on the strains in the term money market by making money directly available to a large number of financial institutions against a wide range of collateral without the stigma of the existing discount window.

The US central bank will offer a total of $40bn (€27bn, £19.5bn) in one-month loans in two separate auctions later this month with the promise of another two auctions in January.