Word: rediscount
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Dates: during 1940-1949
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Last month, Western officials cautiously started to let some money pour into West Germany's economic pool. The Bank Deutscher Länder relaxed credit restrictions by lowering the rediscount rate for its member banks. West Germany's economic boss, Dr. Ludwig Erhard, announced an 8½-billion-mark investment program for the coming fiscal year...
...used automobiles and 20% on most household goods, payment of the balance in 15 months (if less than $1,000) or 18 months (if above $1,000). Meanwhile the trend toward higher interest rates, which the Treasury and FRB had started by upping their short-term and rediscount rates, continued; the Chase National Bank raised its rates on call money (brokers' loans) from...
...Federal Reserve System also moved toward deflation when nine of its twelve district banks raised their rediscount rates (i.e., the rates which member banks pay on loans from the Reserve Banks) from 1¼% to 1½%. Their strategy was the same: to raise the cost and thereby lower the amount of borrowing...
...thought that the results of Snyder's action would prove much of a damper on the inflated market. The cost of borrowing would have to be much higher to be effective. As for the rediscount rise, its effect would only be psychological. Borrowings by member banks from the Federal Reserve Banks are relatively insignificant, at less than $300 million. With excess reserves of over $1 billion, member banks were not likely to raise the volume by much, nor feel any actual pinch because of the higher charges...
Deflation. As expected, the Federal Reserve Banks took a tiny step to curb credit. With Federal Reserve Board approval, the rediscount rate (the interest which member banks must pay on advances from Federal Reserve Banks) was raised from 1% to 1¼% in nine of the twelve FRB districts...