Industry News

Five central banks to provide $90 billion in liquidity

U.S., other countries grapple with credit crisis

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

In a joint effort to relieve fears about deteriorating credit markets, the Federal Reserve and four other central banks said today they will inject more than $90 billion in liquidity into financial markets in coming weeks. In the U.S., the Fed said it will make up to $40 billion available to commercial banks in auctions to be held Dec. 17 and Dec. 20. Additional auctions will be held Jan. 14 and Jan. 28, with amounts to be determined. As fears about losses in securities backed by mortgage loans and corporate debt mount, banks have become reluctant to lend money to each other. Although the Fed cut two key short-term rates Tuesday -- the federal funds rate and the discount rate -- a sell-off in global markets followed the decision as many investors expected deeper cuts. The auctions announced by the Fed today will allow any depository institution judged to be in "generally sound financial condition" by their local Federal Reserve Bank -- and eligible to borrow under the primary credit d...