Detailed description of the Fed's rescue tactics

Into 2008, as the subprime mortgage crisis continues to worsen, turbulent financial markets in the United States, the fed and the Bush administration continues to intensify efforts to rescue, to avoid the situation completely out of control. According to http://finance., 16 day and night, the Fed once again decisive final, a is for financial institutions to create new financing tool and immediately lowered the discount rate from 3.5 to 3.25%. With the US Federal Reserve Chairman Ben Bernanke, the Fed this two urgent decisions aimed at financial institutions provide more financing channels.

The Fed's emergency measures introduced in the middle of a rare, on the one hand, visible on the current United States the seriousness of the financial crisis, on the other hand is visible the Fed's rescue.

United States is now the most immediate and urgent problem is how to restore the financial market stability, and orderly running. After the outbreak of the subprime mortgage crisis, comprehensive, suffered financial system has become a trend, but credit led to a serious lack of market liquidity. Credit to the economy, like blood to life. If individuals and enterprises is difficult to obtain credit, consumption and investment will inevitably be subdued, and threaten the whole economies of normal operation.

In view of this, the fed and the United States Government is from the currency and the financial perspectives, the race to launch rescue measures to promote the orderly operation of the market. Specific to the Federal Reserve, on the one hand, through various means injection of capital to financial markets, increase market liquidity; on the other hand, through a sustained substantial interest rate cuts, the stability of the market to avoid recession. The Bush Administration launched up to 1680 billion stimulus package, through tax rebates to promote consumption and investment.

But based on the subprime mortgage crisis also worsening, rescue measures effect existed hysteresis of current financial markets in the United States will continue to be turbulent. United States investment bank on Friday Bear Stearns liquidity problem "significantly worse" raises significant decline in the market. With the United States economic recession features increasingly apparent, the financial market has become highly sensitive to disturbance may cause market overreaction and exacerbate the economic difficulties of the United States.

If you said in the beginning of the outbreak of the subprime mortgage crisis, the fed and the Bush administration have underestimated the gravity of the crisis, and missed a good opportunity to respond to crises; then, from the present a series of emergency bailout, the fed and the Bush Administration has been fully aware of the severity of the current issue, go to avoid the situation is getting out of control.

14 December, the fed, United States Department of the Treasury and the United States SEC respectively issued a statement stressing that they are paying close attention to the development of the situation in the financial markets. The Fed 16 day publishing two rescue measures, White House spokesman Perry j. emphasized that the United States Treasury Secretary Paulson and Fed Chairman Ben Bernanke is actively take steps to meet current challenges. It can be expected, if the situation continues to deteriorate, the fed and the Bush Administration's rescue efforts will intensify, progress will be accelerated. With the United States rescue measures effect gradually appearing in the second half of the United States is expected to be out of the current difficult situation.