Bankruptcy

Fed Continues to respond to Crisis?by Making More Money Available

By J. Michael McBride

The Federal Reserve has announced that it will again make more and more money available for “cash starved banks” both here and abroad (?!). This continues and expands again the same policy that the Fed has been pursuing for months. One could gather that so far this policy has not worked as it seems necessary to keep pumping more money toward financial institutions, even though they continue to fail.

“All told, the total amount of cash loans -- 84-day and 28-day -- available to banks will double to $300 billion from $150 billion, the Fed said.

Moreover, the Fed will make a total of $620 billion available to other central banks, expanding ongoing currency "swap" arrangements with them where dollars are traded for their currencies. That's up from $290 billion previously in such arrangements.

The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Swiss National Bank and the central banks of Denmark, Norway, Australia and Sweden are involved in those swap arrangements.

The move comes as the U.S. financial meltdown's tendrils have ensnared banks in Britain, the Benelux and Germany.”

Here is a link to the article:
http://biz.yahoo.com/ap/080929/fed_credit_crisis.html

Michael

Full post as published by Texas Lawyer Blog on September 29, 2008 (boomark / email).