WASHINGTON (AP) - The Federal Reserve has approved the financing
arrangement announced by JPMorgan Chase & Co. to acquire Bear Stearns Cos. It
also has approved a cut to its lending rate to financial institutions to 3.25
percent from 3.50 percent and created another lending facility for big
investment banks to secure short-term loans.
The cut to its lending rate and the new loan facility announced Sunday are
the central bank's latest steps to prevent a spreading financial crisis from
plunging the country into its first recession since 2001, if it hasn't toppled
into one already.
The new lending facility will be available to financial institutions on
Monday. It will be in place for at least six months and "may be extended as
conditions warrant," the Fed said.
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