The Federal Reserve this weekend presented a virtual blank check to securities dealers, and set the stage for a possible wider-scale bailout of lending institutions, in an effort to prevent the credit crisis from further debilitating U.S. economic growth.

The Fed — which only last Tuesday announced a $200 billion lending program that allowed borrowers over the next month to post a wide range of investments (including mortgage-backed securities) as collateral — this weekend raised the ante by making available an open-ended amount of capital to the 20 largest investment banks that act as primary dealers of Treasury securities with the central bank. This lending program will be in place for at least the next six months.

Second, the Fed approved a $30 billion line of credit to abet JPMorgan Chase’s takeover of Bear Stearns & Co., the struggling investment bank. The Fed, in essence, assumed most of the risk for Bear’s portfolio, which is heavily larded with subprime mortgage investments. (The Fed insists that the value of Bear’s assets more than cover the credit line.) Morgan, on the other hand, picked up Bear for a song, paying only $2 per share for the company. It remains to be seen whether these transactions inspire confidence in investors, as the stock price of Lehman Brothers fell 30 percent in pre-open trading this morning, and Merrill Lynch’s stock dipped 15 percent.

In an effort to help smaller banks and thrifts gain access to lending capital, the Fed lowered its discount rate to 3.25 percent. Investor and economists now anticipate that the Fed will cut the federal funds rate again tomorrow, by between 75 and 100 basis points. “The Fed is engaged full throttle,” Andrew Brenner, co-head of structured products in New York at MF Global Ltd., told Bloomberg News. His company is the world’s largest broker of exchange-traded futures and options contracts.