Fed proposes role change as emergency bank lender

US - The Federal Reserve yesterday proposed a change in its capacity as lender of last resort, essentially suggesting that credit markets have more of an influence in determining its lending rate on emergency loans to cash-strapped banks.

The US central bank suggested placing its discount rate, the below-market subsidy rate it currently sets on emergency loans to distressed banks, a certain amount above the Fed funds rate - a market rate regulating overnight market lending between banks. The fed

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