Printer Friendly

Fed presidents warn about lending to securities firms.

Global Banking News-6 June 2008-Fed presidents warn about lending to securities firms(C)2008 ENPublishing - http://www.enpublishing.co.uk

Global Banking News - 06 June 2008(c)2005 - Electronic News Publishing - http://www.enpublishing.co.uk

Two Federal Reserve Bank presidents have criticised the American central bank's decision to lend to securities firms.

Charles Plosser, president of the Philadelphia Federal Reserve Bank, and Jeffrey Lacker, president of the Richmond Fed, have said that the decision by the central bank could lead to more problems in the financial sector.

According to them, 'the effect of the recent credit extension on the incentives of financial market participants might induce greater risk-taking.' They argued that greater risk taking could lead to more frequent financial crises.

The remarks were a strong warning about the consequences of the Fed's proposed aid to securities dealers. This is the first time that the Fed will be lending to non-banking companies since the Great Depression.

[Editorial queries for this story should be sent to gbn@enpublishing.co.uk]

((Distributed via M2 Communications Ltd - http://www.m2.com))
COPYRIGHT 2008 Normans Media Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2008 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Global Banking News (GBN)
Date:Jun 6, 2008
Words:179
Previous Article:Fed approves Bank of America takeover.
Next Article:Aeon Bank to expand ATM alliance.


Related Articles
Fed went too far in crisis, say officials.
Fed went too far in crisis, say officials.
Fed went too far in crisis, say officials.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |