Word: frb
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
...bankers, businessmen and consumers, the Federal Reserve Board last week had a Christmas present well in advance of Christmas. To supply more cash and credit for the Christmas shopping season, FRB added $1.3 billion to the lending power of its 6,200 member banks by allowing them to count all cash on hand as reserves. It also lowered the minimum reserves permitted big-city banks from 17½% to 16½% of deposits...
...This was FRB's third move to ease credit in a year, and many businessmen thought it was overdue. The critics think that FRB has moved too slowly to get business moving, and that its previous moves have not been particularly effective. While it has cut the discount rate from 4% to 3% in two installments this year, the prime rate for loans has only dropped from 5% to 41%. Since the prime rate is only for blue-chip customers, long-term rates for poorer risks are still 6% or higher, though short-term rates have dropped. Banks...
Inevitably, in an election year, there were Democratic cries that the FRB was playing politics, though over the years the FRB's record is notably nonpartisan...
...biggest effects of the FRB's actions are not likely to be felt for some time. Bankers hope that the 5% prime rate of U.S. banks-the interest charged the biggest borrowers with the best credit-will not drop too soon. "Any bank in Dallas probably could lend twice as much money as it has available to lend," said a Dallas bank officer, "and the Fed's action won't change this situation." Most big-city banks have some 60% or more of their deposits out in loans, close to the highest deposit-loan ratio in history...
Though long-term interest rates may resist the FRB's downward tug for some time, volatile short-term rates-the costs of financing shipments and storage of goods-have already eased. Many short-term Government securities are held by foreign investors, and the drop in interest rates may encourage them to seek higher rates elsewhere in the world, cause a drain on U.S. gold reserves. The gold outflow has picked up speed in recent weeks, now totals some $384 million this year. But this is a healthy improvement over this time last year when the U.S. had lost nearly...