This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7319413.stm
The article has changed 2 times. There is an RSS feed of changes available.
Previous version
1
Next version
Version 0 | Version 1 |
---|---|
$100bn Fed move over credit fears | $100bn Fed move over credit fears |
(about 5 hours later) | |
The US Federal Reserve will make a further $100bn (£50bn) available to major banks in April, trying to ease concerns about a global credit crunch. | The US Federal Reserve will make a further $100bn (£50bn) available to major banks in April, trying to ease concerns about a global credit crunch. |
The sum, offered across two auctions, is in addition to $260bn provided in short-term loans to the end of March. | The sum, offered across two auctions, is in addition to $260bn provided in short-term loans to the end of March. |
Other unorthodox steps include the Fed allowing investment banks to borrow from it directly - previously only possible for commercial banks. | Other unorthodox steps include the Fed allowing investment banks to borrow from it directly - previously only possible for commercial banks. |
The financial crisis has caused chaos on US and global markets. | The financial crisis has caused chaos on US and global markets. |
This month Bear Stearns became the highest profile US victim of the credit crunch - facing near collapse before a deal was struck for it to be bought at a bargain price by JP Morgan Chase. | This month Bear Stearns became the highest profile US victim of the credit crunch - facing near collapse before a deal was struck for it to be bought at a bargain price by JP Morgan Chase. |
The rescue was supported by the Fed, which agreed to buy up to $29bn of Bear Stearns debts. | The rescue was supported by the Fed, which agreed to buy up to $29bn of Bear Stearns debts. |
The Fed's chairman, Ben Bernanke, will be quizzed about the auctions, and other Fed actions to ease the credit crunch, when he faces Congress next week. | |
Critics say that the central bank is bailing out banks who have not assessed their risks properly | Critics say that the central bank is bailing out banks who have not assessed their risks properly |
Auctions continue | Auctions continue |
Since December the Fed has held auctions every two weeks, offering short-term loans to commercial banks. | Since December the Fed has held auctions every two weeks, offering short-term loans to commercial banks. |
The amounts offered began at $20 billion, rose to $30 billion and were hiked to $50bn in early March as the severity of the credit shortage grew. | The amounts offered began at $20 billion, rose to $30 billion and were hiked to $50bn in early March as the severity of the credit shortage grew. |
They are set to continue until at least September. | They are set to continue until at least September. |
The hope is that the extra cash will ease the fears that banks have of lending money to each other, which have pushed short-term interest rates to record highs, despite the Fed's series of interest rate cuts. | The hope is that the extra cash will ease the fears that banks have of lending money to each other, which have pushed short-term interest rates to record highs, despite the Fed's series of interest rate cuts. |
This week there were concerted moves by central banks to bring down the Libor - the rate at which banks lend to one another - which is currently close to the high levels at the beginning of the credit crunch. |
Previous version
1
Next version