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 WASHINGTON (AP) - The Federal Reserve, acting urgently over the weekend to stabilize financial markets, approved a cut in its emergency lending rate to 3.25 percent from 3.50 percent — a new lending facility immediately available Monday to Wall Street firms.
The central bank took the extremely rare step Sunday evening to calm panicked markets by offering to provide cash to financially squeezed Wall Street investment houses — basically becoming a lender of last resort for them. The move will allow big investment firms to quickly secure short-term loans.
"These steps will provide financial institutions with greater assurance of access to funds," Federal Reserve Chairman Ben Bernanke told reporters in a brief conference call Sunday evening.
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