The Federal Reserve hopes to relieve short-term funding pressures by adding cash to banks through auctions and providing $24 billion in currency-swap lines to the European and Swiss central banks, Bloomberg reported.

The Fed is coordinating these efforts with the European Central Bank, the Bank of England, the Bank of Canada and the Swiss National Bank, the agency said in a statement. The Fed will auction term funds to banks against a “wide variety of collateral.” All “generally sound” institutions can participate, the statement said. The central banks are taking the steps after demand for cash shot borrowing costs up.

The Fed’s first auction of term funds will be $20 billion on Dec. 17. The second auction will provide up to $20 billion and take place Dec. 20. The central bank plans two more auctions on Jan. 14 and Jan. 28, with possible additional operations thereafter, the Fed said.

“By allowing the Federal Reserve to inject term funds through a broader range of counterparties and against a broader range of collateral than open market operations, this facility could help promote the efficient dissemination of liquidity when the unsecured interbank markets are under stress,” the Fed statement said.

Stocks rallied this morning after the announcement. Futures on the Standard & Poor’s 500 stock index advanced 2 percent to 1,507.80, recovering from the drop after the Federal Open Market Committee lowered the benchmark rate by a quarter point to 4.25 percent yesterday.