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Message #113224 posted by forged registration (Info) March 11, 2008 20:26:15 ET
In Reply to: fed reserve auctions $190 billion posted by forged registration (Info) March 11, 2008 20:23:56 ET
the fedreseve is now accepting sketchy bank loans as payment!! how is that not a bailout???
Markets soar as central banks move on credit crunch
Last Updated: Tuesday, March 11, 2008 | 5:58 PM ET Comments25Recommend126
CBC News
North American stock markets surged Tuesday after the Bank of Canada and other central banks jointly announced they would pump more than $240 billion US into the financial system to ease a global credit squeeze.
The announcement came an hour before markets opened. By the close of trading, the S&P/TSX composite index had gained 339 points to a close of 13,345. The Dow Jones industrial average was up 417 points at 12,157. That was the Dow's biggest percentage gain in five years.
European markets also surged.
The Bank of Canada's share of the liquidity boost is $4 billion, delivered in two installments — half on March 20 and the rest on April 3.
The move follows a similar joint intervention taken last December when global credit markets were tightening.
"Pressures in some of these markets have recently increased again,'' the bank said in a statement on its website. "We all continue to work together and will take appropriate steps to address those liquidity pressures."
The Bank of Canada acted along with the U.S. Federal Reserve, the European Central Bank, the Bank of England, and the Swiss National Bank.
Up to $200 billion US available from Fed
The Fed said it would make up to $200 billion US available to banks in exchange for debt that may be of less-than-stellar quality. The Fed said it would accept non-government mortgage-backed securities as collateral.
Loans would be secured for four weeks rather than the usual overnight time frame.
The lending facility "is intended to promote liquidity in the financing markets for treasury and other collateral and thus to foster the functioning of financial markets more generally," the Fed said.
As part of the co-ordinated liquidity plan, the Bank of England will inject 10 billion pounds ($20 billion Cdn) into the financial system. The European Central Bank will kick in $15 billion US and the Swiss National Bank will add $6 billion US.
The global credit squeeze has tightened in the last few weeks, making financial institutions more reluctant to make loans.
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