Tools of Monetary Policy II

Tools of Monetary - Tools of Monetary Policy II From Last Time • When is the Federal Reserve not the lender of last resort Whenever it chooses

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Unformatted text preview: Tools of Monetary Policy II From Last Time • When is the Federal Reserve not the lender of last resort? Whenever it chooses not to be. People and businesses go bankrupt all the time without the Federal Reserve attempting to line up credit for them. • Do banks ever profit from discount loans? Yes, if the discount rate is below prevailing market interest rates, banks can profit from taking out a discount loan. However, the Fed takes a dim view of it. More about Discount Policy Discount Rates--historic through present Current Discount Rate Period in Effect Percent Per Annum 01/31/96 to present 5 Historical Discount Rate Period in Effect Percent Per Annum 11/16/14 to 12/15/14 6-1/2 12/16/14 to 12/23/14 6 12/24/14 to 01/08/15 5-1/2 01/09/15 to 02/19/15 5 02/20/15 to 05/21/15 4-1/2 05/22/15 to 09/09/18 4 09/10/18 to 12/12/19 4-1/2 12/13/19 to 01/25/20 4-3/4 01/26/20 to 05/31/20 6 06/01/20 to 05/09/21 7 05/10/21 to 10/04/21 6-1/2 10/05/21 to 11/06/2 6 11/07/21 to 01/10/22 5-1/2 01/11/22 to 08/14/22 5 08/15/22 to 10/14/24 4-1/2 10/15/24 to 09/12/27 4 09/13/27 to 02/06/28 3-1/2 02/07/28 to 04/24/28 4 04/25/28 to 05/13/29 4-1/2 05/14/29 to 02/07/30 5 02/08/30 to 04/14/30 4-1/2 04/15/30 to 09/11/30 4 09/12/30 to 03/15/34 3-1/2 03/16/34 to 01/07/35 3 01/08/35 to 05/13/35 2-1/2 05/14/35 to 08/23/37 2 08/24/37 to 03/27/42 1-1/2 03/28/42 to 01/11/48 * 1 01/12/48 to 08/12/48 1-1/4 08/13/48 to 08/21/50 1-1/2...
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This note was uploaded on 11/22/2011 for the course FIN FIN1100 taught by Professor Bradrifkin during the Fall '09 term at Broward College.

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Tools of Monetary - Tools of Monetary Policy II From Last Time • When is the Federal Reserve not the lender of last resort Whenever it chooses

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