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Growth

Fed moves to bolster market liquidity

3 minute read
The Adviser

The US Federal Reserve (Fed) has announced two measures this week to “bolster market liquidity” and “promote orderly market functioning”.

One of the measures, announced Sunday, was to cut the bank lending rate by 0.25 per cent to 3.25 per cent.

The Fed also authorised the creation of a lending facility to improve the ability of primary dealers to provide financing to participants in securitisation markets, an arrangement active from yesterday and in place for at least the next six months.

This means non-bank lenders will be able to borrow from the Fed on much the same terms as banks.

Published: 18-03-08

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