Conley
11-30-2011, 09:28 AM
WASHINGTON — The Federal Reserve (http://topics.nytimes.com/top/reference/timestopics/organizations/f/federal_reserve_system/index.html?inline=nyt-org) moved Wednesday with other major central banks to buttress financial markets by increasing the availability of dollars outside the United States, reflecting growing concern about the fallout of the European debt crisis (http://topics.nytimes.com/top/reference/timestopics/subjects/e/european_sovereign_debt_crisis/index.html?inline=nyt-classifier).
The European Central Bank borrowed $552 million through the existing facility during the week ending Nov. 23 to meet the liquidity needs of European banks. Data for the past week is not yet available.
Under the new terms of the program, the existing interest rate premium of 0.1 percentage points on those loans will be reduced by half, to 0.05 percentage points, effective Dec. 5.
The other central banks said they had also agreed to make similar loans of their own currencies as necessary, but they noted that the only extraordinary demand at present was for dollars.
http://www.nytimes.com/2011/12/01/business/central-banks-move-together-to-ease-debt-crisis.html?hp
So the Fed is lending millions of dollars to foreign banks for have a percent interest. Doesn't that seem odd? Basically giving the money away and the best case scenario is that their banking systems don't collapse. How is this good for the U.S. and the American people?
The European Central Bank borrowed $552 million through the existing facility during the week ending Nov. 23 to meet the liquidity needs of European banks. Data for the past week is not yet available.
Under the new terms of the program, the existing interest rate premium of 0.1 percentage points on those loans will be reduced by half, to 0.05 percentage points, effective Dec. 5.
The other central banks said they had also agreed to make similar loans of their own currencies as necessary, but they noted that the only extraordinary demand at present was for dollars.
http://www.nytimes.com/2011/12/01/business/central-banks-move-together-to-ease-debt-crisis.html?hp
So the Fed is lending millions of dollars to foreign banks for have a percent interest. Doesn't that seem odd? Basically giving the money away and the best case scenario is that their banking systems don't collapse. How is this good for the U.S. and the American people?