The Federal Reserve said Wednesday that it joined some of the world’s major central banks in a coordinated action to inject liquidity into the global financial system.
Joining in the move were: the Fed, The Bank of Canada, the Bank of England, the Bank of Japan and the European Central Bank, the Fed said.
“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the Fed said in a statement.
The move by the banks came as Europe struggles to contain a debt crisis that threatens to squeeze global credit and choke off economic growth, possibly throwing the world economy into recession.
Standard & Poor’s downgraded the ratings on many of the world’s major banks late Tuesday, including top U.S. banks, amid worries whether the banks can withstand another recession and a worsening situation in Europe where countries such as Greece and Italy teeter at the edge of defaulting on their debt.
Even China’s mighty economy is feeling the aftershocks. China’s central bank cut the reserve requirement ratio, the amount of cash banks are required to keep on hand, in an attempt to shore up its economy.
(Source: MSNBC)
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Bailouts for needy Billionaires and Trillionaires. Millionaires need not apply – remember this is limited to banks, particularly dumb ones who made bad decisions and don’t want to pay the consequences. Just as welfare tends to corrupt the recipients (note how traditionally our community gives charity privately rather than making people beg, and often used “jobs” and “loans” as a vehicle for chairty), corporate welfare corrupts the recipients (which is usually a few billion times more of a problem).
It will help the economy, or at least stock prices, in the short run (and for most people, all that matters is the next 11 months).