Foundation for Economic Education
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Fed Offers to Lend Billions to Credit Market
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Impelled to take extraordinary measures for the second time in less than a week, the Federal Reserve moved on Tuesday to subdue the deepening crisis in credit markets by stepping up as lender of last resort. In an action that sent stock prices soaring, the central bank offered to let the biggest investment banks on Wall Street borrow up to $200 billion in Treasury securities in exchange for hard-to-sell mortgage-backed securities as collateral. And the Fed made clear that it was prepared to do more as needed. (New York Times [1], Wednesday)
More of what got us into the mess in the first place.
FEE Timely Classic
Subprime Monetary Policy [2] by Gerald P. O'Driscoll Jr.
Article printed from Foundation for Economic Education: http://www.fee.org
URL to article: http://www.fee.org/articles/in-brief/fed-offers-to-lend-billions-to-credit-market/
URLs in this post:
[1] New York Times: http://www.nytimes.com/2008/03/12/business/12fed.html?_r=1amp;hpamp;oref=slogin
[2] Subprime Monetary Policy: http://www.fee.org/publications/the-freeman/article.asp?aid=8183
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