Busted: Bankers and The Global Economy

January 29, 2008

Cash Infusion for Ailing U.S. Banks

Filed under: banking, federal reserve, government, money, politics — Tags: , , , , , , , — digitaleconomy @ 6:24 am

The fact that Federal Reserve is auctioning money to U.S. commercial banks is proof of the severity of the banking financial crisis brought on by the mortgage banking crisis. The Federal Reserve, at the expense of the American taxpayer, is bailing out U.S. banks that are willing to bid on the funds. The bottom line is added to the spiraling debt that this country carries.

The Federal Reserve, working to combat effects of a serious credit crisis, said Tuesday it had auctioned $30-billion (U.S.) in funds to commercial banks at an interest rate of 3.123 per cent.

Report On Business 1/29/2008

This occasion marked the fourth in a series of innovative auctions the Fed began last month in an effort to provide cash-strapped banks with extra reserves. The Fed’s hope is that the increased resources will keep banks lending and prevent a severe credit squeeze from pushing the country into a recession.

Mr. Bernanke has said that the current auction process will continue for as long as needed to make sure that banks have sufficient reserves.

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