As lenders and consumers continue to hoard, the Fed announces a $800B spending spree:
The central bank will purchase as much as $600 billion in debt issued or backed by government-chartered housing-finance companies. It will also set up a $200 billion program to support consumer and small-business loans, the Fed said in statements today in Washington.
Yet across the pond Libor continues to rise:
Libor’s declines are stalling on concern the U.S. government’s attempts to contain the financial crisis won’t be sufficient to revive bank lending.
And not included in that $800B is the $230B of taxpayer funds the Fed has put at risk with the bailout of Citigroup this week.
∙ Fed Commits $800 Billion More to Unfreeze Lending [Bloomberg]
∙ Libor Drop Stalls as Bailout Concern Fuels Bank-Cash Hoarding [Bloomberg]
∙ Citigroup gets a monetary lifeline from feds [SFGate]