Scrambling to ease the strain on the credit market, the Federal Reserve announced a $200 billion program on Tuesday that would allow financial institutions, including the nation’s major investment banks, to borrow ultra’safe Treasury money by using some of their riskiest investments as collateral. Wall Street responded with a rally, with the Dow Jones industrials surging 250 points.

The Fed normally lends Treasury securities to banks for just a few hours. Under the new program, money will be lent for 28 days and the central bank will accept nongovernment mortgage-backed securities - the source of the current crisis in the credit markets - as collateral.

The Fed will require that the assets, which are linked to soured home loans, have a premium credit rating. But the program will effectively allow some of the nation’s biggest brokerage firms to hand over potentially damaged securities to the government in exchange for the safest securities in the market.