The Ministry of Finance and U.S. Federal Reserve has officially launched a program to support consumer credit market, reports AFP. The program will be implemented through the buying derivative securities of various types of consumer loans, including car loans and debts on credit cards.
The total amount of the program in the future may rise to a trillion dollars. With its help it is to overcome the lack of lending and restore economic activity in the country, because of the credit crisis.
The Fed, under this program, known as the Term Asset-Backed Securities Loan Facility (TALF) will fund companies-holders of derivative securities, secured consumer credit. Prerequisite for the exchange of public funds for these securities will be the maximum credit rating (AAA) last. The program will operate at least until December 2009.
Private partners of this program will receive a number of preferences. In particular, in respect of them will not apply restrictions on the salaries to managers. Such restrictions have been adopted for all companies involved in other programs of state support.
This program will become a regular in the American economy through the Fed. The total amount of this aid could reach more than 7 trillion dollars. Recall that the size of a plan to stimulate the American economy, adopted in February 2009 by Congress, would be 787 billion dollars.
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