Banks pump billions to calm the markets
Fed joins global bid to ease credit crisis
By Steven Syre and Ross Kerber, Boston Globe Staff | August 11, 2007"The Federal Reserve and central banks around the world yesterday took the extraordinary step of pumping more than $100 billion into financial markets riven by a credit crisis, the largest such intervention since the September 11 terrorism attacks.
Sign up for: Globe Headlines e-mail | Breaking News Alerts In a rare public statement, the Fed said it wanted to ensure financial markets had enough money to continue operating in an orderly fashion.
"In current circumstances," the Fed said, banks "may experience unusual funding needs because of dislocations in money and credit markets."
Financial markets are reacting seemingly overnight to the jarring end of an era of easy money, when higher-risk borrowers enjoyed nearly unfettered access to huge sums at low interest rates. The market for subprime mortgages, to people with less than perfect credit histories, cracked first and remains the most seriously impaired, but other types of credit such as corporate junk bonds and mortgages backing commercial property are also under duress.
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http://www.boston.com/business/globe/articles/2007/08/11/banks_pump_billions_to_calm_the_markets/