Fed, central banks offer unlimited funds
TEXT OF STORY
Bill Radke: International cooperation was the word over the weekend as world governments held emergency meetings in Washington and Paris. The U.S. Federal Reserve, the Bank of England, European Central Bank and the Swiss National Bank announced they’ll all provide unlimited dollar funds to ease the banking crisis. Ashley Milne-Tyte tells us more.
Ashley Milne-Tyte: Central banks have already poured money into their systems, but banks have been hoarding that cash.
Neil McKinnon is chief economist of the ECU Group in London. He says banks have been reluctant to lend and there haven’t been enough dollars to go around. That means bank lending rates have climbed.
Neil McKinnon: It’s meant that some very big corporates have had problems funding, and of course if corporates have problems funding then the real danger is that they just end up going bust. That means that people lose their jobs.
So he says by allowing unlimited access to dollars the Fed’s taking a big step toward getting cash into the hands of those who need it. He says this move could go a long way to ending the liquidity crisis.
In New York, I’m Ashley Milne-Tyte for Marketplace.
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