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Posted by: Michael Mandel on March 16
Imagine my surprise today (Sunday) when I went to the Federal Reserve site to pick up some industrial production data for my textbook. Instead, I found an emergency press release from the Fed, cutting the discount rate. What’s more, the Fed set up yet another way to lend to the big Wall Street firms, the “Primary Dealer Credit Facility.” This time, they can bring almost anything as collateral:
Primary dealers may secure loans under the PDCF with all collateral eligible for pledge in open market operations, plus investment grade corporate securities, municipal securities, mortgage-backed securities, and asset-backed securities.
The kitchen sink, indeed.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.