Tuesday, December 9, 2008

Gauging the Fed's Deeds

Government intervention is necessary to protect the public interest,Mr.Bernanke asserted,but the offset of financial turmoil has been incomplete.The Fed has taken a number of extraordinary steps,such as the Term Auction Facility,resulting in large increases in the amount of credit available to the banking system.There were also the foreign currency swap line agreements with 14 other central banks,but judging the effectiveness of the Fed's liquidity programs is difficult.Certainly the credit markets would have been much worse without Fed intervention,the Chairman maintained.

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