Federal Reserve Moves to Combat Credit Crisis

The Federal Reserve, seeking to combat effects of the credit crisis, said Tuesday that it had auctioned another $30 billion in funds to commercial banks, at an interest rate of 3.080 percent. It was the sixth in a series of auctions that so far have pumped $160 billion into the nation's banking system in an effort to provide cash strapped banks with extra reserves. The Fed's hope is that the increased resources will keep banks lending and prevent a severe credit squeeze from making the current economic slowdown worse. It is beginning to look really bad with all the people losing their homes and it sounded this morning like a lot of it was due to those very banks making bad loans to people. Making bigger loans to them than they could afford.