updated 3/20/2008 4:17:44 PM ET 2008-03-20T20:17:44

The Federal Reserve, seeking to ease a painful credit crisis, announced Thursday that it make $75 billion of much-in-demand Treasury securities available to big investment firms next week.

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Investment houses will get an opportunity to bid on a slice of the securities at a Federal Reserve auction next Thursday. The new lending program was announced by the Fed last week.

The Fed will allow investment firms to borrow up to $200 billion in super-safe Treasury securities by using some of their more risky investments as collateral.

By allowing this, the Fed is hoping to take pressure off financial companies and make them more inclined to lend to people and businesses.

The first of the weekly auctions will be next Thursday, and a second will be held on April 3, the Fed said Thursday as it released details of its upcoming operations.

Financial institutions would be allowed to put up other securities — including mortgage-backed securities. Nervous investors have shunned mortgage-backed securities, making them especially difficult to trade.

The housing collapse and credit crunch has led to record-high home foreclosures and forced financial companies to rack up multibillion losses in complex mortgage investments that turned sour.

In the past day and weeks, the Fed has announced a number of extraordinary moves aimed at making sure that problems in credit and financial markets don’t sink the U.S. economy.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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