Federal Reserve To Extend “Loan Program” Into 2009

July 8th, 2008 5:42 pm  |  by Marc Gallagher  |  Published in Banking, Debt, Economics, Federal Reserve, Free Market, Money  |  0

The Federal Reserve Chairman Ben Bernanke announced today that the organization is likely to continue its “emergency loan program” to investment banks into next year.

From Bloomberg:

July 8 (Bloomberg) — Federal Reserve Chairman Ben S. Bernanke, seeking to allay renewed concerns over the health of the nation’s financial system, said the central bank may extend its emergency-loan program for investment banks into next year.

“The Federal Reserve is strongly committed” to financial stability and is “considering several options, including extending the duration of our facilities for primary dealers beyond year-end,” Bernanke said in a speech to a conference in Arlington, Virginia.

The Fed chairman’s comments come a day after Fannie Mae and Freddie Mac fell to their lowest level since 1992 and the Standard & Poor’s 500 Banks Index dropped to a 12-year low. It’s the first time Bernanke has indicated how long he’ll extend the lending programs that were introduced in March in a provision of Fed credit to nonbanks unprecedented since the Great Depression.

I suppose this is not surprising for the Fed watchers among us.

Read the full article here.

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