The Federal Reserve on Monday said it had agreed to inject $70 billion into financial markets amid turmoil following the bankruptcy of Wall Street giant Lehman Brothers.
The New York Fed, acting on behalf of the Washington-based Federal Reserve central bank, said it agreed to a series of so-called “repurchase agreements” to ensure market liquidity. It said it provided cash to banks pledged against US agency and mortgage-backed securities, in operations amounting to $50 billion and $20 billion.
The move steps up actions by the Fed begun last year when credit flows started seizing up as banks began reporting multibillion dollar losses and writedowns tied to the housing market’s woes. (The Economic Times)