From Reuters:
The U.S. Federal Reserve provided the banking system with $38 billion on Friday, the largest amount of liquidity since the days after the September 11 attacks six years ago, adding ample funds for the second day running as financial markets fretted over credit conditions.
In its statement after Friday's first market operation, the Fed said it would provide liquidity as needed "to facilitate the orderly functioning of financial markets.
"In current circumstances, depository institutions may experience unusual funding needs because of dislocations in money and credit markets," it said.
The last time the central bank made a similar statement was after the September 11, 2001, terror attacks, when it also said it would do what was necessary to keep markets functioning normally. The Fed made a similar vow in October 1987 following a precipitous decline in U.S. stock markets.
Central banks worldwide have now injected at least $326.3 billion in the past 48 hours to prevent markets from spinning into a global liquidity squeeze. Short-term interest rates spiked in response to banks' decreased willingness to lend to each other.
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1 comment:
now all we need is for the banks to freeze all adjustable rate mortgages for 24 months to keep american families from losing their
homes. wishful thinking i guess.
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