RobertB
January 22nd, 2008, 09:51 PM
Fed Cuts Won't Help Lending
Liz Moyer, 01.22.08, 3:54 PM ET
When Ben Bernanke cuts rates, banks don't necessarily lend more freely.
Despite the Federal Reserve's efforts to pump money into the banking system and get banks to jump-start the moribund credit markets, lenders have been pulling in their horns in the face of mounting losses. And the pullback isn't just in subprime residential mortgages. It's in virtually all categories, from consumer credit cards and auto loans to commercial real estate and loans to big business.
On Tuesday the Federal Reserve's Open Market Committee dramatically slashed short-term rates 75 points, to 3.50%. The Fed also slashed the rate it charges banks to borrow directly from its discount window, to 4%. Many economists expect it will cut again when it meets at a regularly scheduled session next week.
http://www.forbes.com/home/wallstreet/2008/01/22/fed-banks-citigroup-biz-wall-cx_lm_0122banks.html
Liz Moyer, 01.22.08, 3:54 PM ET
When Ben Bernanke cuts rates, banks don't necessarily lend more freely.
Despite the Federal Reserve's efforts to pump money into the banking system and get banks to jump-start the moribund credit markets, lenders have been pulling in their horns in the face of mounting losses. And the pullback isn't just in subprime residential mortgages. It's in virtually all categories, from consumer credit cards and auto loans to commercial real estate and loans to big business.
On Tuesday the Federal Reserve's Open Market Committee dramatically slashed short-term rates 75 points, to 3.50%. The Fed also slashed the rate it charges banks to borrow directly from its discount window, to 4%. Many economists expect it will cut again when it meets at a regularly scheduled session next week.
http://www.forbes.com/home/wallstreet/2008/01/22/fed-banks-citigroup-biz-wall-cx_lm_0122banks.html