Busted: Bankers and The Global Economy

February 13, 2008

Another Federal Reserve Auction

Filed under: banking, central bank, federal reserve, money — Tags: , , , , , , — digitaleconomy @ 12:48 am

The U.S. Federal Reserve auctioned 30 billion U.S. dollars in funds to commercial banks Monday in an effort to deal with the persistent credit crunch.

China View Article

This the fifth auction action that the Fed has taken designed to add liquidity to the U.S. commercial banking system. The auction is private and the borrowing bank list is secret. The commercial banks had avoided borrowing money from the central bank through its discount window, out of concern that investors would see the move as an indication of the banks’ underlying financial problems.

San Francisco Federal Reserve president Janet Yellen said the nation’s economy still faces a “significant threat,” suggesting the Fed’s primary concern near term will continue to be the health of the economy rather than fears of inflation down the road.

Sacramento Business Journal

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