The Federal Reserve, still working to combat the effects of a severe credit squeeze, said Tuesday it had auctioned another $50 billion to cash-strapped banks. Meanwhile, the International Monetary Fund warned that further actions are needed globally to prevent more wrenching problems.The Fed auction marked the ninth in a series that began in December that so far have pumped $310 billion in short-term loans into the nation's banking system. Meanwhile, the 185-nation IMF delivered its most detailed review yet of the global credit crisis that hit last August. It said Tuesday that governments must be prepared to do more to support the global financial system if conditions worsen.

"Markets remain under considerable strain" from a variety of forces such as weakened balance sheets from increased bad loans, the IMF said in a report prepared for meetings this week in Washington of the IMF and its sister lending institution, the World Bank.



The global credit crisis is expected to be a top agenda item at those discussions. The IMF report urged policymakers in the United States and other nations to consider what else needs to be done.

"The critical challenge now facing policymakers is to take immediate steps to mitigate the risks of an even more wrenching adjustment, including by preparing contingency and other remediation plans, while also addressing the seeds of the present turmoil," the IMF said.

Federal Reserve Chairman Ben Bernanke and his colleagues hope that the increased resources being supplied in the Fed auctions will encourage banks to keep lending to consumers and businesses and alleviate the economic drag from a severe credit squeeze that began last August.

In a related move, the European Central Bank, which serves the 15 nations that use the euro as their common currency, announced Tuesday that it had auctioned $15 billion in short-term credit to European banks. It was the sixth auction conducted in tandem with the Fed as the two central banks continue to coordinate their efforts to battle the credit crisis.

Bernanke told Congress last week that it was possible that all the blows the economy has sustained from the credit crisis, a prolonged housing slump and now rising unemployment could push the country into a recession. But he said he still believed that the period of weakness would be short-lived and the economy would resume stronger growth in the second half of this year.

The Fed has been holding its auctions to supply direct loans to commercial banks every two weeks starting in December.

The auctions are only one of a number of emergency procedures the central bank has employed to battle the credit crisis, which claimed its biggest victim last month with the forced sale of Bear Stearns, the nation's fifth largest investment bank, to JP Morgan Chase & Co.

In addition to the auctions which supply loans for 28 days to commercial banks, the Fed announced last month that it was employing Depression-era provisions to allow investment banks to borrow directly from the Fed. Previously, only commercial banks had that privilege.

This week's auction, which was held on Monday with the results announced Tuesday, attracted 79 bids seeking a total of $91.6 billion.

(This version CORRECTS NEW throughout to UPDATE with IMF report and actions by European Central Bank, SUBS final graf to correct number of bids to 79 sted of 91.)

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