Accessibility links

US Federal Reserve Moves Again to Help Economy

Economic officials from major nations are struggling to reverse a global credit crisis that threatens to stall the economy.

In the United States, the central bank is working to restore short-term credit that is crucial to many companies. The Federal Reserve (central bank) is making short-term loans by buying what is called "commercial paper." These short-term loans usually come from pools of investment money, but the price of these loans has been soaring recently.

At the same time, European Union finance ministers are trying to reassure bank depositors by increasing the size of accounts that are protected by insurance against bank failures. EU ministers are also discussing joint responses to the financial crisis.

The International Monetary Fund is calling on finance ministers around the world to coordinate their efforts.

Global stock markets posted mixed results Tuesday after Monday's major losses.

European stock markets were up between one and two percent in volatile trading, while a key stock index in Japan was down three percent at the close of trading.

Major U.S. indexes gained in early trading Tuesday. On Monday, the best-known U.S. stock index closed below the 10,000 mark for the first time in four years.

A rescue plan for financial institutions was approved on Friday, and U.S. President George Bush said investors need to give the $700 billion effort time to work.