Federal Reserve chairman Ben Bernanke has said the bank may keep open a lifeline to financial firms.
Bernanke promised to consider retaining an emergency lending facility for Wall Street firms past the end of the year. This was seen as a signal that the Fed is determined to stop the housing-inspired credit crisis from wreaking further havoc on the economy.
In remarks to a mortgage lending forum sponsored by the Federal Deposit Insurance Corp, Bernanke said credit costs have been driven higher and the pace of US economic growth also hurt by market turmoil.
The Fed set up the so-called Primary Dealer Credit Facility, or PDCF, in March as part of its effort to facilitate the purchase of ailing investment bank Bear Stearns by JPMorgan Chase. It said at the time the PDCF would continue for at least six months.
The lending programme allows primary dealers - the biggest firms that deal directly with the Fed - to borrow directly from the Fed at the discount rate, currently 2.25%.
