Monday, March 17, 2008

Federal Reserve's Emergency Weekend Meeting

Hoping to prevent a global financial crisis, the Federal Reserve announced two initiatives designed to "bolster market liquidity and promote orderly market functioning." First, the Federal Reserve Board voted unanimously to create a short-term lending facility to extend credit to "primary dealers" (large investment banks). Second, the Board voted unanimously to loser the primary credit rate from 3 1/2 percent to 3 1/4 percent. Read the press release from the Federal Reserve.

The rare Sunday night action, occurred after the collapse of The Bear Sterns Companies Inc., which is being bought by JPMorgan Chase & Co. for $2 a share. The Federal Reserve Board also approved the financing arrangement for the buyout. Read the press release from JPMorgan Chase.

Read "Fed Takes Broad Action to Avert Financial Crisis" from the Washington Post, "Sunday surprise: Fed steps into credit crisis" from, and "Fed Cuts Lending Rate to Financial Institutions to 3.25%" from FOXBusiness.

You might also want to check out's special report, Fed Focus, for all news related to the Federal Reserve.

Craving more information? Check out the library's guides on Banking and Business and Economics.

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