Fed to inject up to $200 billion into financial markets
March 11 2008 Market Watch.com The Fed announced a new temporary lending program on Tuesday that will allow participants in the bond markets to swap the mortgage-backed securities that they can't currently sell for highly liquid Treasurys that they can. The hope is that the extra money in the financial system will restore trust and keep prices of illiquid securities from plunging. Counting the latest action, the Fed will have provided more than $400 billion in Treasurys in an effort -- so far futile -- to grease the wheels of commerce that have seized up. The Fed hopes the action will give bond dealers comfort that they'll be able to find financing, Fed senior officials told reporters. The move was not an effort to prop up any particular firm, they said. | more |
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