Tuesday, July 8, 2008

Bernanke Eyes Extending Emergency Loans

It's headline news. Bernanke spoke this morning at the Federal Deposit Insurance Corporation's Forum on Mortgage Lending for Low and Moderate Income Households, in Arlington, Virginia.

During his speech he said that the Fed is considering giving squeezed Wall Street firms more time to draw emergency loans directly from the central bank to help them overcome credit problems.

"We are currently monitoring developments in financial markets closely and considering several options, including extending the duration of our facilities for primary dealers beyond year-end should the current unusual and exigent circumstances continue to prevail in dealer funding markets," Bernanke said.

I always expected the Fed to extend the loans, what else are they going to do, the banks don't have the money to pay back the loans?

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