Word: rediscounted
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Dates: during 1930-1939
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...milestone in Federal Reserve history was passed last week. Following the example of the Reserve Banks of Chicago, Atlanta, Minneapolis and Richmond, which cut their rediscount rates from 2% to 1½% (TIME, Aug. 30), the Federal Reserve Bank of New York last week cut its rate from 1½% to 1%. This is the lowest fee for loans to member banks ever posted by any central bank in the world. Sample rates in Europe today: Bank of France and Reichsbank. 4%; Bank of England and Bank of The Netherlands. 2% ; Swiss National Bank, 1½%. Lowest previous rate...
...often was he interrupted by catcalls, loud expressions of dissent and ironic cries of "Vive la Banque!" Wide open was the governor to shareholders' jokes, for his report, written a while before, was crammed with cheer, confidence and numerous vows to defend the franc and the low rediscount rate. At the moment the franc was sinking, the Bank of France had just hiked the rediscount rate from 2% to 4% and the state of the franc required Britain's aid in the form of a $250,000,000 loan...
...them in cold storage instead of letting them seep into the credit system (TIME, Jan. 4), the threat of a further expansion in excess reserves has been largely removed. And with the present total shaved to a figure within the reach of the standard tools of credit control-the rediscount rate and open market operations in government bonds-Chairman Eccles is now battened down for a boom blow...
Principal action taken by the Bank of France last week was to boost the rediscount rate from 5% to 6%, the normal central banking method of inducing capi tal to remain in a country. But the flight from the franc continued...
Having cut reserves by one or both of these means, Chairman Eccles could then apply the final brake-upping of the rediscount rate. At present this action would be ineffectual, for banks do not need to borrow from the Reserve. The weakest link in this brake chain is the fact that selling of the Reserve's Government bonds would be flatly contrary to Treasury policy so long as there are huge budget deficits to be financed...