Ben Bernanke doing taxpayers a favor- lending their money and dumping toxic assets on them in return

Extract from the Fed's press release-
"The collateral eligible to be pledged at the Primary Dealer Credit Facility (PDCF) has been broadened to closely match the types of collateral that can be pledged in the tri-party repo systems of the two major clearing banks. Previously, PDCF collateral had been limited to investment-grade debt securities.

The collateral for the Term Securities Lending Facility (TSLF) also has been expanded; eligible collateral for Schedule 2 auctions will now include all investment-grade debt securities. Previously, only Treasury securities, agency securities, and AAA-rated mortgage-backed and asset-backed securities could be pledged.

These changes represent a significant broadening in the collateral accepted under both programs and should enhance the effectiveness of these facilities in supporting the liquidity of primary dealers and financial markets more generally.

Also, Schedule 2 TSLF auctions will be conducted each week; previously, Schedule 2 auctions had been conducted every two weeks. In addition, the amounts offered under Schedule 2 auctions will be increased to a total of $150 billion, from a total of $125 billion. Amounts offered in Schedule 1 auctions will remain at a total of $50 billion. Thus, the total amount offered in the TSLF program will rise to $200 billion from $175 billion.

The Board also adopted an interim final rule that provides a temporary exception to the limitations in section 23A of the Federal Reserve Act. It allows all insured depository institutions to provide liquidity to their affiliates for assets typically funded in the tri-party repo market. This exception expires on January 30, 2009, unless extended by the Board, and is subject to various conditions to promote safety and soundness."

As NYT comments- "...But the Fed, and ultimately the taxpayers, could get left holding the bag. In allowing investment banks to post collateral that includes stocks, junk bonds and subprime mortgage-backed securities, the Fed said it would be mirroring the rules of two industry-operated overnight lending systems, known as tri-party repo systems, operated by JPMorgan Chase and Bank of New York.

Fed officials have themselves expressed concern that those lending programs needed to reassess their practices because lenders were holding collateral that might prove difficult to sell. In recent years, financial institutions have been making loans based on relatively less liquid assets, Donald Kohn, vice chairman of the Federal Reserve, warned in a speech last May."

Looks like Ben does not care about loading taxpayers with toxic assets, but cares a lot about his friends on Wall Street. Rather than letting nature take its course and punish those who took bad risks, he is making it easier for people to 'bail.'