Saturday, July 12, 2008
Fancy a cheap mortgage?
The fact is, even your Aunt Mabel could get an emergency loan from the Fed. Typically, the Fed has acted as a lender of last resort only for commercial banks. But the Fed has authority to lend to almost anyone, if the Fed Board of Governors agrees that conditions are dire enough. Under Fed regulations, regional Fed banks can offer loans to any "individual, partnership, or corporation" under "unusual and exigent circumstances" but only "if, in the judgment of the Federal Reserve Bank, credit is not available from other sources and failure to obtain such credit would adversely affect the economy."