Fed moves to thaw money markets

[Roland99]

Source: MarketWatch

Fed moves to thaw money markets
Liquidity move comes as progress on U.S. bailout plan provides little respite

WASHINGTON (MarketWatch) - The Federal Reserve took unprecedented moves Monday to provide massive dollar liquidity to thaw crucial money markets

The Fed action, coordinated with central banks around the world, came as commercial banks remain reluctant to provide important short-term loans to each other amid continued turmoil in the U.S. and European banking sector.

The Fed said it was boosting the size of its dollar swap arrangements to $620 billion from $290 billion previously. The agreement is with nine central banks.

...

Included in the Fed swap lines are the Bank of Canada, the Bank of England, the Bank of Japan, the National Bank of Denmark, the European Central Bank, the Bank of Norway, the Reserve Bank of Australia, the Bank of Sweden and the Swiss National Bank.

Read more: http://www.marketwatch.com/news/story/no-thaw-money-markets-despite/story.aspx?guid=%7BB9FDED4B%2D0F55%2D4115%2D9DE7%2DDA9F376CF823%7D&dist=hplatest

[Skink]

1. What do the need congress for?

[trudyco]

2. Can you explain this to the economically challenged? -nt

[Roland99]

3. Essentially, the Fed has doubled the credit limit that allows central banks to borrow dollars.

these are short-term loans but this shows that there is still a massive credit squeeze going on, despite the "hope" of the bailout bill (which is large in its amount but not large enough to have the effect they want, rather, it will only increase our debt and increase the rate of inflation)