Tags: US | Fed | Exit | Strategy

Fed Adopts Plan to Let Banks Set Up CDs to Drain Liquidity

Friday, 30 Apr 2010 12:40 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

The Federal Reserve has adopted a plan allowing banks to set up the equivalent of certificates of deposit at the central bank.

The move would help the Fed mop up money pumped out during the financial crisis and prevent inflation from taking off later.

Under the plan, the Fed would offer so-called "term deposits" that would pay interest. Doing so would provide banks with another incentive to park their money at the Fed, rather than having it flow back into the economy.

Once the economy is on firm footing, this would be one of the tools the Fed could use to tighten credit.

The Fed says Friday's action has "no implication for the near term conduct of monetary policy."

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

O'Reilly: Colbert Has 'No Bleeping Clue' How to Fight ISIS

Monday, 29 Sep 2014 22:40 PM

Fox News host Bill O'Reilly shot back at Comedy Central's Stephen Colbert, who last week mocked O'Reilly's idea of a mer . . .

Vatican Sends Official to KC in Pedophile Shielding Case

Monday, 29 Sep 2014 21:39 PM

The Vatican has sent a church official to Kansas City to examine the leadership of Roman Catholic Bishop Robert Finn, wh . . .

Attorney: Psychiatric Exam Could Mean Jailed Marine's Freedom

Monday, 29 Sep 2014 20:48 PM

Andrew Tahmooressi, a Marine sergeant jailed in Mexico after he said he mistakenly crossed the border with three guns, w . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved