The Federal Reserve has a long program Tuesday is expected to increase the availability of credit for consumers and small businesses.The U.S. Federal Reserve is up to 200 million U.S. dollars to loan to - for cars, education, credit cards and other consumer debt. The money will be used to provide financing for investors to purchase the debt.
The bold, the term asset-backed securities, the marginal lending facility, was the first time last year and was originally to begin in February.
Participants - companies and investors to include guarantees for the loan - loans for the new government on 17 March. The Fed will be granted loans of three years on 25 March.
The Fed said the program has the potential to provide up to $ 1 trillion of loans to businesses and households.
"This is the catalyst for TALF securitization markets, providing finance to investors, their purchases of certain securities AAA asset-backed securities, the Fed and the U.S. Treasury, in a joint statement." The lender TALF to the financing needs of consumers and small businesses and helps to stimulate the economy in general. "
Under the program, the Federal Reserve Bank to buy ABS with different types of credit card debt, automobile, student loans and for small businesses. Loans - the worst since the 1930s - is much harder for people to make money, and we can digitalsole high.
Before the financial crisis, banks are very much on the packaging of securities and has sold for more loans. This process has about 25 percent of all cars, and other student loans, which in recent years, the U.S. Treasury said on Tuesday, the credit until the bottom of the verdict in October.
Anil Kashyap, a professor at the University of Chicago in the cabin of the Business School, said that the program is to provide consumers with the necessary loans. But he warned that the Fed is prepared to a portion of the debt and to distort the markets for other measures, which no government debt less attractive for investors.
"We want the markets in Central is not working properly," says Kashyap.
Fed is considering the program is running until December, but said that could be expanded.
Timothy Geithner Secretary in the Ministry of Finance has requested an extension of the Fed on the program of the 10th February, said he also will provide assistance for the asset-backed securities, mortgages. The central bank has teams of the Federal Reserve and the Treasury on the lookout for commercial real estate.
The Fed and the Treasury plan being that the securities in the fleet of rental vehicles and certain equipment - also for the heavy industry and agriculture - are eligible for funding by the Federal Reserve in its report dated April surgery.
The participants in the second round of funding applied for loans from the Government on 7 April by the Federal Reserve Bank has to pay on 14 April.
The program, said the Fed is still on the values that the effects of the most important to the economy in trouble and the weakness of financial markets and may be at low risk for the government.
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