U.S. Treasury to up securities sold to the public

updated 11:34 a.m. ET Oct. 8, 2008

WASHINGTON - The Treasury Department, facing huge borrowing needs because of the government's $700 billion rescue program, said Wednesday it will increase the size of Treasury securities being sold to the public.

The Treasury said it would expand the number of Treasury securities which are currently being traded as a way to boost borrowing.

In a statement, the department said this will also deal with what it called "severe dislocations in the market." The demand for Treasury securities has soared during the current credit crisis as investors park their money in safe-haven, U.S. government-backed bills, notes and bonds.

Treasury's effort will be done through what is known as a "re-opening" of securities that the government has already sold. The first announcements Wednesday added $40 billion to four securities already being traded, including seven-year and 10-year notes. The increases were in $10 billion increments.

The Treasury statement said the move should address "acute, protracted shortages" in the Treasury securities markets.

Treasury said it would hold discussions with other government regulators including the Federal Reserve and with bond traders to search for remedies to ensure that Treasury securities sales don't get hit with the same stresses in the future.

Also in msnbc.com business ConsumerMan: Be careful with vacation tweets GM hopes this time’s a charm with Bob Lutz Answer Desk: So you have a crystal ball, eh? Interactive: Ten cars that Detroit will regret   CNBC video: Is the recessio really over?

MORE FROM ECONOMY IN TURMOIL

Economy in Turmoil Section Front

Fed sees economic slowdown easing Analysis: Obama takes ownership of economy   Government says no bailout for lender CIT Consumer prices rise at fastest pace in months Wholesale prices jump more than expected Geithner: Recession easing, U.S. on the mend CIT in talks with regulators over liquidity Obama urges patience on stimulus plan Obama considers bailout for small business A leaner GM zooms out of bankruptcy Economy in Turmoil Section Front   Add Economy in Turmoil headlines to your news reader: