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: Gift of giving takes on whole new meaning ‘Reaching out’ and the other worst buzzwords of the year Your Career: Tips for job hunting during the holidays MotorHead: New Audi R8 is a refined land rocket   Video: Wall Street sees record-breaking profits

MORE FROM ECONOMY AT A CROSSROADS

Economy at a Crossroads Section Front

NYT: Taxpayers at risk with mortgage giants Senate panel approves Bernanke nomination Recession hits Rust Belt towns hard Latest data points to slow recovery in 2010 Economic survey points to growth in 2010 Construction of new homes rebounds Inflation stays in check as housing starts rise Homebuilder outlook dips despite tax credit Great Recession spawns biz buzzwords Industrial production rises more than expected Economy at a Crossroads Section Front   Add Economy at a Crossroads headlines to your news reader: