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FEDERAL RESERVE SYSTEM'S BOARD OF GOVERNORS CHAIRMAN BERNANKE TESTIFIES ON IMPLEMENTING THE EMERGENCY ECONOMIC STABILIZATION ACT AND OTHER MARKET INTERVENTIONS BEFORE HOUSE PANEL

Article from: US Fed News Service, Including US State News Article date: November 18, 2008

The House Financial Services Committee issued the following testimony from a full committee hearing:

STATEMENT BY BEN S. BERNANKE CHAIRMAN BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

BEFORE THE COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF REPRESENTATIVES

Chairman Frank, Ranking Member Bachus, and other members of the Committee, I appreciate having this opportunity to review some of the activities to date of the Treasury's Troubled Asset Relief Program, or TARP, and to discuss recent steps taken by the Federal Reserve and other agencies to support the normalization of credit markets.

The ...

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Fed Will Buy Up Short-Term Debt to Boost Credit

Posted Oct 7, 08 8:35 AM CDT in Business 

Fed Will Buy Up Short-Term Debt to Boost Credit
Source: AP Photo/Manuel Balce Ceneta

(Newser) – The Federal Reserve today launched a new plan to buy up companies’ unsecured short-term debt in yet another effort to unfreeze the credit markets, the New York Times reports. Underscoring a sense of urgency on Wall Street as the crisis spread across Europe and Asia yesterday, the radical plan would essentially permit the Fed to lend directly to businesses.

The amount of commercial paper in circulation for financing day-to-day operations of  corporations has dramatically shrunk, falling 11% in just the last 3 weeks.  But buying commercial paper would put the Fed in possession of assets that potentially could lose value, normally prohibited. One senior bank executive told the Washington Post the move was "like taking the fire sensors out of the building."

More about:  bailout • Federal Reserve • credit crisis • Ben Bernanke • credit market • commercial paper

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