The Federal Reserve Board expanded the scope of eligible collateral under the Term Asset-Backed Securities Loan Facility on Friday to include commercial mortgage-backed securities, exposing the central bank to more risk as it seeks to repair a market that collapsed during the middle of last year.

"The inclusion of CMBS as eligible collateral for Talf loans will prevent defaults on economically viable commercial properties, increase the capacity of current holders of maturing mortgages to make additional loans and facilitate the sale of distressed properties," the Fed said.

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