Voice of the Customer

TMCnet - The World's Largest Communications and Technology Community
New Coverage :  Asterisk  |  Call Center Outsourcing  |  Call Recording  |  SIP Trunking  |  Hosted Exchange  |  PBX
Webinars
Channels by Topic
Share
 
| More
RSS-XML alerts
Print this page
E-mail this page to a friend
Voice of the Customer Featured Article Archive

TMCNet: Big investment firms pull back on Fed borrowing from emergency lending program

[April 24, 2008]

Big investment firms pull back on Fed borrowing from emergency lending program

(Associated Press WorldStream Via Acquire Media NewsEdge) WASHINGTON_Big Wall Street investment companies are pulling back on their borrowing from the Federal Reserve's emergency lending program, a sign that credit conditions may be improving a bit.

A Federal Reserve report Thursday said those firms averaged $22.6 billion (?14.33 billion) in daily borrowing over the past week. That compares with $24.8 billion (?15.73 billion) in the previous week. It marked the third straight week where investment firms borrowed less from the central bank.

The program, which began on March 17, is one of several extraordinary actions the Fed has taken recently to limit the damage from a trio of crises - housing, credit and financial.

After the sudden crash of Bear Stearns, the fifth-largest U.S. investment bank, fears grew that others might be in jeopardy, given major stresses in credit and financial markets.

Scrambling to avert a market meltdown, Fed Chairman Ben Bernanke and his colleagues _ in the broadest use of the central bank's lending authority since the 1930s _ agreed last month to temporarily let investment firms obtain emergency financing from the Fed, a privilege previously granted only to commercial banks.

The program, similar to the one the Fed has long had for commercial banks, will continue for at least six months. It gives investment firms a place to go for overnight loans. Commercial banks and investment companies pay 2.5 percent in interest for the loans.

Banks, meanwhile, averaged $10.7 billion (?6.79 billion) in daily borrowing for the week ending April 23. That compares with $7.8 billion (?4.95 billion) for the previous week. The identities of commercial banks and investment houses are not released.

As part of the effort to relieve credit strains, the Fed auctioned $59.46 billion (?37.71 billion) in super-safe Treasury securities to investment firms on Thursday.

The auction _ the fifth of its kind _ fetched bids totaling less than the $75 billion (?47.56 billion) worth of securities the Fed was making available. That could suggest that demand for Treasuries may be moderating a bit. And that might be viewed as a sign of some improvement in credit conditions, analysts said.

"Although the $59.5 billion (?37.73 billion) sold is still a sizable amount, it does suggest that liquidity strains could be easing," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.

In exchange for the 28-day loan of Treasury securities, bidding firms can put up more risky investments as collateral, including certain shunned mortgage-backed securities.

In the five auctions held so far, the Fed has provided nearly $218.41 billion (?138.51 billion) worth of the Treasury securities to investment firms. The program began March 27.

In Thursday's auction, investment firms paid an interest rate of 0.2500 percent for a slice of securities.

The auction program is intended to help financial institutions and the troubled mortgage market.

The goal is to make investment houses more inclined to lend to each other. It also is aimed at providing relief to the distressed market for mortgage-linked securities. Questions about their value and dumping of these securities had driven up mortgage rates, aggravating the housing slump.

___

On the Net:

Federal Reserve Bank: http://www.federalreserve.gov

Copyright ? 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[ Back To Voice of the Customer Community's Homepage ]
› Return to Voice of the Customer Home

FOLLOW US

FREE Voice of the Customer eNewsletter

Subscribe Now

Featured White Papers

  • Seven Best Practices for Speech Analytics: Speech analytics is valuable for identifying issues in the contact center. However, limiting its use to the contact center only considers a portion of all customer interactions and subsequently only reveals a small part of the voice of the customer. This paper discusses how organizations can optimize their Speech Analytics implementation strategy to realize the promise of this exciting technology.
  • Understanding the Voice of the Customer: Today's contact centers involve a sea of information that must be captured, processed, and distributed on a daily basis. Effective use of this information enables companies to remain competitive in an increasingly aggressive and customer centric marketplace. An overwhelming percentage of the information that circulates in a contact center's audio recordings, documents, web pages, and emails is unstructured in that it resides outside of a normal structured database and cannot be managed efficiently. These unstructured items contain valuable information, yet this information historically has been difficult to organize, categorize, and access.
View All ›

Case Studies

  • Aflac: Aflac, the leading provider of guaranteed-renewable insurance turned to Autonomy to help them automate the process of monitoring their contact center agent for quality and compliance. The company now has a system that can offer continued improvement in agent quality and productivity while enhancing the customer experience. ...
  • Avaya: Avaya, a global leader in business communications, inherited 880 websites as well as numerous intranets and extranets when it was spun off from Lucent Technologies. The sheer volume and diversity of the sites and the over 500 content creators resulted in inefficient content distribution rife with divergent branding, messaging, and product information. ...
View All ›

Video Showcase

    Interview with Autonomy: Rich Tehrani interviews Simon Hayhurst, SVP of Autonomy

Featured Events

  • Multichannel Analytics with Autonomy Explore: In today's world of constant connectivity there are a variety of direct and indirect channels of communication between an enterprise (or a brand) and its customers. 80% of these valuable interactions are generated in a human-friendly, unstructured format across multiple touchpoints and channels. With this ever growing mountain of information how do you extract the emerging trends and topics of interest to the enterprise? ...
  • SES Chicago 2011: Marketers and SEO professionals attend SES Chicago each year to network and learn about topics such as PPC management, keyword research, SEO, social media, local, mobile, link building, duplicate content, multiple site issues, video optimization, site optimization, usability and more. The conference offers 70+ sessions, intensive training workshops, and an expo floor packed with companies that can help you grow your business. While you're at it, network with peers and leading industry vendors. Programmed by the SES advisory board, you can be assured - SES content really is king! ...
View All ›
 
Share
 
| More
RSS-XML alerts
Print this page
E-mail this page to a friend