Business   

Fed to buy U.S. short-term debts

PHOTO: AP

COMES A BREATHER: Traders gather at a post that handles Bank of America on the New York Stock Exchange floor on Tuesday. Wall Street showed some signs of easing.

WASHINGTON: The Federal Reserve announced on Tuesday a radical plan to buy massive amounts of short-term debts in a dramatic effort to break through a credit clog that is imperiling the U.S. economy.

The Federal Reserve will buy “commercial paper,” a short-term financing mechanism that many companies rely on to finance their day-to-day operations, such as purchasing supplies or making payrolls. The $99.4 billion daily market for this crucial financing, which relies on investors rather than banks, has virtually dried up.

That has made it increasingly difficult and expensive for companies to raise money to fund their operations. Commercial paper is a way of borrowing money for short periods, typically ranging from overnight to less than a week. — AP

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Sensex drops further on selling
Air India to operate in new routes
Fed to buy U.S. short-term debts
Tata Steel wins Deming award
Interactive banking service launched
Rupee breaches 48-mark
Symantec launches new security products
Nikon to unveil head mounted ‘UP’
CTS inaugurates Budapest centre
Airtel DTH service to offer 175 channels
Wartsila to enhance presence
Exchange Rates
Bullion Rates
Mahindra Renault launches new Logan variant
DHL to expand business with SAARC region
Spice Tele, Spanco to form BPO venture
Future Generali’s retirement plans

Copyright © 2008, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu