The total expansion of Federal Reserve footing is substantial:
But the size of the footing is being reduced. The commercial paper facility CPFF reduced by almost 90 billion last week and foreign central bank funding lines via large currency swaps also reduced. The is an obvious improvement. If this carried on, and it seems it will, it seems the Federal Reserve has been completely successful in restoring liquidity.
The majority of the Federal Reserve expansion to the crisis has not been in the AIG and dealer fundings, contrary to the press and public perception. Rather it has been in two areas, commercial paper purchases and also foreign swap likes to central bank where the Fed for an agreed unwind level at an agreed time , is credited by a foreign central bank and amount of foreign currency and in return the Fed credits that foreign central bank and amount of dollars. These dollars are then deployed by the foreign central bank in various US dollar denominated support operations in their respective countries.
The size of these swap lines is striking, peeking at 600 billion last quarter and currently at 465 billion. That combined with the CPFF facility totals to over 800 billion of additional Federal Reserve "factors" or bank credit provided.
One can see the improvement in the relationship of Fed Funds versus one month LIBOR in 2 year swaps, correcting to below 20 basis points (.20%) at levels indicating fully functioning and liquid bank credit money markets.