Global Central Banks Cut Rates

In order to sail through global financial crisis, and maintain high level of liquidity in the market some of the major Central banks cut interest rates.

Find below the modified interest rates.

Federal Reserve Rate : 1.5%

European Central Bank : 3.75%

Canada Central Bank : 2.5%

Bank of England, UK : 4.5%

Sweden Bank : 4.25%

China Central Bank : 6.3%

Analyst said the in order to maintain liquidity in the market and faith in the financial market system, Central banks may decide to lower the interest rates further down.

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Mohit

700 Bn $ bail out request by US president.

The current US financial crisis let the US president to lookout for 700Bn$ bail out package from federal reserve and the Congress.But the question is if the federal reserve and congress approve this bail out amount, who will bear the burden of this bailout? Is it the US taxpayers, or the next govt. Recent survey shows that US taxpayers are very reluctant to bear this bailout, and they are asking federal reserve not to approve it. But US treasury head, Henry Paulson supported this move by the US govt. He said, that the bailout is necessary in order to revive US economy and also the World economy. He further added that the bailout will certainly help the tax payers, will create more jobs in the economy, and will certainly help in streamlining US financial system.


What do u think about the US 700Bn$ bailout plan. Post ur comments below.

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Mohit Kumar

Goldman Sachs and Morgan Stanley change their LOB.

It seems that US financial crisis is still not over, today two another biggest Investment banks, Goldmann Sachs and Morgan Stanley at Wall Street approach federal reserve to change their LOB from Investment banking to more regulated Commercial or retail banking.

Reason behind the decision :
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Recent fall of Merrill Lynch and Lehman Brothers really hit the backbone of the financial industry in US. Even these two Investment banks were also had the substantial exposure to subprime mortgage loans on their books, which resulted in heavy quarter looses. As in this difficult times its very difficult to get loans from the money market, so they decided to move to more safer and regulated commercial banking space.

Impact on this decision :
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These banking operation of these banks will be more regulated. They can approach Federal Reserve for the bailout loans without any hassle.

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Thanks&Regards,
Mohit Kumar