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Consumer lending programme still needed: Bernanke.

WASHINGTON Federal Reserve Chairman Ben Bernanke said Friday a government programme intended to spark lending to consumers and businesses is still necessary even with other emergency lending programs winding down as the economy recovers. An ongoing need still clearly exists for the programme, which also is aimed at making sure loans flow to the troubled commercial real estate market, Bernanke said in brief remarks prepared for a conference here sponsored by the Congressional Black Caucus Foundation. The Term Asset-Backed Securities Loan Facility, or TALF, goes to the heart of efforts by the Fed and Obama administration to get credit flowing more normally again, a key ingredient to a lasting economic recovery. The Fed has extended the TALF -- which has the potential to generate up to a $1 trillion in lending for households and businesses -- into next year. It was originally set to expire at the end of this year. Under the programme, which got off to a slow start in March, the Fed provides loans to investors. They use the money to buy newly issued securities backed by auto and student loans, credit cards, business equipment, commercial real estate and loans guaranteed by the Small Business Administration. In the first phase, the Fed was making $200 billion available for the loans. However, investors have requested far less than that. Still, Bernanke said the program is responsible for indirectly financing nearly 3 million loans to households -- excluding credit cards -- and nearly 400,000 loans to small business

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Publication:Qatar Tribune (Doha, Qatar)
Date:Sep 26, 2009
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