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Fed puts extra $30bn into markets | Fed puts extra $30bn into markets |
(about 1 hour later) | |
The US Federal Reserve is making $30bn (£16.1bn) available to central banks in Australia, Denmark, Sweden and Norway, to ease money markets. | The US Federal Reserve is making $30bn (£16.1bn) available to central banks in Australia, Denmark, Sweden and Norway, to ease money markets. |
The Fed said the aim was to "improve liquidity" globally, at a time when the availability of credit is limited. | |
The Fed made a similar move with central banks in the UK, Canada, Japan and the European Central Bank last week, making $180bn available. | The Fed made a similar move with central banks in the UK, Canada, Japan and the European Central Bank last week, making $180bn available. |
The Federal Reserve said it would take "further steps" if necessary. | The Federal Reserve said it would take "further steps" if necessary. |
Commercial banks in each country can access the $30bn in the form of loans to increase short-term funding requirements. | Commercial banks in each country can access the $30bn in the form of loans to increase short-term funding requirements. |
The central banks in Australia and Sweden will have access to $10bn and Denmark and Norway will have $5bn each. | The central banks in Australia and Sweden will have access to $10bn and Denmark and Norway will have $5bn each. |
Central banks worldwide have been taking initiatives to boost the availability of funds, following a credit crunch that hit finance firms last summer. | Central banks worldwide have been taking initiatives to boost the availability of funds, following a credit crunch that hit finance firms last summer. |
With the emergence of the sub-prime crisis and a huge rise in defaults on loans, banks have been increasingly reluctant to lend to each other. | With the emergence of the sub-prime crisis and a huge rise in defaults on loans, banks have been increasingly reluctant to lend to each other. |
This in turn has made it harder for businesses and individuals to gain access to credit. | This in turn has made it harder for businesses and individuals to gain access to credit. |
The central banks involved in the latest currency swap deal involve the Reserve Bank of Australia, Sweden's Riksbank, Denmark's Nationalbank and Norway's Norges Bank. | The central banks involved in the latest currency swap deal involve the Reserve Bank of Australia, Sweden's Riksbank, Denmark's Nationalbank and Norway's Norges Bank. |
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