The Federal Reserve took action Sunday to provide additional liquidity for markets and expand the types of assets that broker-dealers can exchange for Treasury securities through its Term Securities Lending Facility - assets that now include municipal bonds.

However, market participants said the Fed's action to provide additional liquidity to the market in lieu of a federal governmental bailout of Lehman Brothers Holdings, Inc. may not have much of an effect on the municipal market, because firms are likely to hold onto their municipal securities and exchange their less liquid securities.

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