The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Friday August 17 – No one leaves unscathed

"It's really troubled. Everything is being tarred with the same brush and investors in funds that buy commercial paper are ringing and asking: 'You're not in that asset backed CP are you?' And if funds have bought ABCP, investors don't want to hear about whether it's good ABCP or not, they're out of there"

The week Wall Street went into meltdown



melt-clipping6.gif

So Bernanke blinked. One week on from the start of giant central bank liquidity injections and deus ex machina time rolls round again. The morning clouds lift with news that the Federal Reserve is cutting by 50bp the discount rate at which banks can raise emergency funds to 5.75% from 6.25%, leaving it just 50bp above the Fed funds rate, which is the general base rate.

In addition, it is to widen eligible collateral for these loans to include certain mortgage-backed securities. News emerges of a conference call this morning between Fed officials and the CEOs of leading financial institutions including Bank of America’s Ken Lewis, Citi’s Chuck Prince, JPMorgan’s Jamie Dimon and Lloyd Blankfein of Goldman Sachs.



Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to Euromoney.com and Asiamoney.com analysis and receive expertly-curated updates direct to your inbox.

 

Already a user?

Login now

 

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree