How not to raise market confidence: Fed looking into unsecured lending
Posted on October 7th, 2008 by bile Tags: Ben Bernanke, Department of the Treasury, economics, Federal Reserve, Federal Reserve System, frozen inter-bank money market, Hank Paulson, the Financial Times, unsecured lendingThe U.S. Federal Reserve is reportedly looking at getting into unsecured lending, an extreme step that could allow it to directly purchase commercial paper, according to a report in the Financial Times. The report said the Fed had never done so in its history, but doing so could allow it to participate in the frozen inter-bank money market and the contracting commercial paper market. The Fed doesn’t believe it has the legal mandate to make unsecured loans, so it would need the Treasury to guarantee any losses. The Fed had said in a statement on Monday that “the Federal Reserve and the Treasury Department are consulting with market participants on ways to provide additional support for term unsecured funding markets.”
This charade is sad at times. They are grasping at straws… either because they think they have to or because they don’t know any better. Unfortunately for us their mistakes are our hard times.
2 Responses to “How not to raise market confidence: Fed looking into unsecured lending”
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October 7th, 2008 at 8:38 am
Second link from financial times.
@bile - I stuffed this link away in a draft post the other day . Is this a good method for everyone to dump a link or snippet that they or someone else might later flesh out into real post? Or can only authors read their own drafts?
October 7th, 2008 at 8:44 am
Authors can only read their own drafts… editors can read anyone’s. I’m the only editor at the moment. I may be able to give read but not write access to others drafts but i’m not certain. When I get some time I’ll look into a solution.