(Adds details on term auctions, swaps from Fed statement)

WASHINGTON, Sept 29 (Reuters) - Major central banks threw more resources at a deepening credit crisis on Monday, announcing a $330 billion expansion of reciprocal currency swap arrangements to boost U.S. dollar liquidity.

The Federal Reserve said in a statement that the action will increase the swap lines with the European Central Bank and eight other central banks to $620 billion from $290 billion previously. The Fed also said it would expand term funding auctions to head off a possible year-end cash crunch at financial institutions.

“Central banks will continue to work together closely and are prepared to take appropriate steps as needed to address funding pressures,” the Fed said in the statement.

For its part, the Fed said it would increase the size of 84-day maturity Term Auction Facility loans to $75 billion per auction from $25 billion, beginning with the Oct. 6 auction. This will double the amount of term auction credit available in the 84-day and 28-day loans to $300 billion from $150 billion.

In addition, the Fed said it will hold two “forward” TAF auctions totaling $150 billion that will be conducted in November to reassure market participants that term funding will be available over year-end. The timing of these auctions will be determined after consulting with institutions that use the TAF program.

The increased central bank swap lines will allow dollar liquidity of up to $240 billion provided by the ECB, $30 billion by the Bank of Canada, $80 billion by the Bank of England, $120 billion by the Bank of Japan, $15 billion by Danish central bank, $15 billion by Norway’s central bank, $30 billion by the Reserve Bank of Australia, $30 billion by the Swedish central bank and $60 billion by the Swiss National Bank.

Dollar funding rates outside the United States have are higher than those available domestically, reflecting a structural shortfall abroad.

“The increase in the amount of foreign exchange swap authorization limits will enable many central banks to increase the amount of dollar funding that they can provide in their home markets,” the Fed said. “This should help to improve the distribution of dollar liquidity around the globe.” (Reporting by David Lawder; Editing by Tom Hals)