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In an unusual weekend move, the U.S. Federal Reserve slashed its emergency lending rate for financial institutions by 25 basis points
CFO Staff, CFO.com | US
March 17, 2008
Over the weekend, the U.S. Federal Reserve reduced its primary lending rate to financial institutions from 3.5 percent to 3.25 percent. The rate cut, made on Sunday, was part of a one-two punch delivered by America's central bank to beat back liquidity problems in the market, and reduce the negative impacts of the ongoing U.S. credit crisis.
The Fed also authorized a lending facility for primary dealers — which are essentially large investment banks — to bolster the securitization market. The new facility will allow banks to continue to lend into that market, and is available on Monday. See the Fed's statement here.