Business news for Mon, 31 Dec 2007 & with word reserve. 2 news.

SAN FRANCISCO (MarketWatch) -- The U.S. Federal Reserve added $17.5 billion in temporary reserves to the banking system Monday through overnight repurchase agreements, or repos, through the New York Fed's Open Market Desk. "The large operations this morning are intended to offset the drain to reserves arising from an elevated balance in the Treasury's account at the Fed," the New York Fed said in a statement on its Web site. The Fed injected $13.5 billion through a 4-day repo, and $4 billion through a 2-day repo. "Clearly the Desk is looking to provide a lot of liquidity into the system for the turn of the year," wrote analysts at Action Economics.

1. The housing market suffered its worst slump since the Depression and foreclosures soared as the collapse of the subprime mortgage market rattled banks around the world. Financial service companies were expected to report one of their worst years ever, and the Federal Reserve is proposing tighter lending rules to protect consumers and rein in irresponsible lenders.