billion, more than two hundred times the daily average for the previous month. the flood of funds released into the banking system reduced the immediate need for banks to rely on payments from other banks to make the payments they themselves owed others. open market operations were a second tool at our disposal for pumping additional liquidity into the system. indeed, as you may know, open market operations are the chief tool employed by the federal reserve to affect the global supply of dollars in circulation. in these operations, our trading desk at the federal reserve bank of new york enters the market daily to buy or sell treasury securities. contrary to one of the early fears, most of our counterparties in these transactions, the community of primary dealers, were generally functioning starting on september 12. our trading desk in new york met all propositions at the intended funds rate from september 12 through september 17, and the system engaged in a record level of open market operations through overnight repurchase agreements. to accommodate these demands, the trading desk operated later in the day than normal, giving dealers an opportunity to assess their financing needs. also, the fed ’ s securities lending program expanded its provision of securities to the marketplace, and those securities in turn could be used as the collateral for private - sector liquidity arrangements. the staff of the federal reserve bank of new york, having evacuated its main site and gone to its backup facility, performed heroically in running the open market operations. despite the increased liquidity resulting from discount window lending and open market operations, some institutions still had difficulty exchanging payments and lending or borrowing funds because of connectivity problems and the closure of key markets. as a result, many depository institutions incurred larger - than - usual daylight overdrafts on their accounts at the federal reserve. to help in this situation, the federal reserve waived the overdraft fees it normally charges. between september 11 and september 21, peak and average daylight overdrafts incurred by depository institutions were approximately 35 percent and 30 percent higher than normal levels, respectively. on september 14, daylight overdrafts peaked at $ 150 billion, more than 60 percent higher than usual, despite federal reserve opening account balances of slightly more than $ 120 billion. the destruction of infrastructure in lower manhattan meant that some foreign financial institutions might not be able to provide sufficient collateral to underpin funding from their usual counterparties and correspondent banks. these foreign firms turned to their national central banks for dollar - based liquidity. the federal reserve arranged for the

availability of reciprocal currency facilities of up to $ 50 billion with the european central bank and $ 30 billion with the bank of england, both in the form of thirty - day swaps. we also lifted the ceiling of a preexisting swap with the bank of canada to $ 10 billion. the federal reserve ’ s role as a provider of check collection services presented another opportunity for providing liquidity. check collection relies on a fleet of airplanes to fly checks all around the country so that the checks can be presented to their home bank for payment. though u. s. airspace was closed for several days after the attacks, the federal reserve banks continued to provide credit for checks on the usual availability schedules. this accommodation allowed businesses and consumers that depended on the prompt availability of their check deposits to withdraw the proceeds of these check deposits as they expected. with other regulators and supervisors, the federal reserve issued a statement on friday, september 14, encouraging state member banks and bank holding companies to work with customers affected by the events of september 11. the board has a long - standing policy of encouraging bankers to work flexibly with customers affected by disasters. that policy recognizes the need for taking prudent steps to make credit available to sound borrowers and for adjusting terms and conditions of loans and transactions to take account of the stresses during a crisis. i am sure that several reserve bank presidents and directors of supervision communicated this message directly to commercial bankers in their districts. we also recognized that the banks ’ balance sheets might expand as businesses and consumers turned to banks for funding. through an interagency statement, we invited banks that experienced such an expansion of their balance sheets to contact their regulator to discuss ways to respond. ultimately, to further increase liquidity, on the morning of september 17, the policymaking body of the federal reserve system, the federal open market committee, met by teleconference and then publicly announced a 50 basis point decrease in the intended federal funds rate from 3. 5 percent to 3. 0 percent. the federal reserve also worked with other regulators through the president ’ s working group on financial markets to monitor developments in financial markets. as you know, the government securities market postponed settlements for a few days, the commercial paper market experienced significant problems, and the new york stock exchange remained closed until september 17. we supported fully restoring financial markets to normal operations as soon as practical. however, in working with the securities and exchange commission, the department of the treasury, market participants, and other stakeholders to