Fed, ECB plan to take foreign collateral - paper (Fed to use Euro for lending)

[UpInArms]

Source: Reuters

BERLIN, Aug 27 (Reuters) - The U.S. Federal Reserve and the European Central Bank are planning to change collateral rules to allow commercial banks to use foreign currency collateral, the Financial Times Deutschland reported late on Wednesday.

The FTD cited "information from financial circles" as saying that the Fed and ECB were considering setting up a formal arrangement that would allow banks to use euro-denominated collateral to borrow dollars from the Fed and vice versa.

The FTD said in its Thursday edition that the Fed wished this to be a permanent arrangement, while the ECB preferred such a facility only to be available during emergencies.

<snip>

Currently banks can only receive central banks funds in the same currency as they have collateral for, apart from two recent Fed-backed arrangements with the ECB and Swiss National Bank which enable the latter two banks to lend dollars against euro and franc collateral.

Read more: http://www.reuters.com/article/bondsNews/idUSLR27167420080827

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even the Federal Reserve (which is NOT a government entity) is abandoning the dollar

[defendandprotect]

1. Wow . . . !!!

Will this mean that US citizens can more easily change their dollars for Euros at

American banks?

[Demeter]

2. Silly Rabbit! Euros Are for Bankers!

Not for American people, who might want something worth more than the paper it's printed on.

[Demeter]

3. I think we need a 24/7 "Econoline"

Apologies to Ford Motors.

[Mojorabbit]

4. Can anyone

explain why the rules were changed and what benefit this will have for banks?

[natrat]

5. assume the worst, as usual

[razors edge]

7. When the dollar collapses,

as it will, they won't be left with confederate paper in the vaults.

Remember that game with chairs, and interrupted music?

[defendandprotect]

8. It's been costly already . . . for all of us ---

and you have quite a way with making things clear --- !!!

Thanks, I think -- ouch!

[unblock]

6. the fed IS a government entity

don't believe all the hyperventilating b.s. you read on the internets.
it was created by the federal reserve act of 1913 and is a government entity in every possible meaning of the word.

this particular agreement is mutual so the fed is no more abandoning the dollar than the ecb is abandoning the euro.

this is just an way of easing liquidity for banks on both continents. it may or may not be wise, but it has nothing to do with "abandoning" any currency.

[defendandprotect]

9. The Fed is profiting from the issuance of dollars . . . charging us interest on what they print --!

A job the Treasury should be fulfilling --

Additionally, they have been making political decisions about our economy -

and ever at one point over our Social Security/FICA rates via Greenspan . . . !!!

Did you elect them to do all of that --- ???

[unblock]

10. so your beef is that decisions are made by the appointed people on the fed

instead of the appointed people at the department of the treasury?

and the fed doesn't affect social security/fica rates, congress does. all greenie did was testify. and he did say some stupid things, but congress is free to get its b.s. testimony from wherever they think they can get the answers they want to hear.

i don't know that the fed arrangement is ideal, but i shudder to think of where our economy would be right now if shrub had more direct control over the printing of money!

[defendandprotect]

11. Evidently, you've a low level of awareness on this subject . . .

so your beef is that decisions are made by the appointed people on the fed
instead of the appointed people at the department of the treasury?

JFK moved the printing of our money from the FED to the Treasury . . .
because the FED charges us interest on the money they print ---
they profit from it --- it becomes an expense for us.
As soon as JFK was assassinated that was overturned and the printing
was returned to the FED.

Evidently, you think we should pay a private bank INTEREST on the money they print
while our Treasury could -- and rightly should --- print the money without interest?????
You want to try to explain your thinking . . . ???

And, you seem to be lacking another bit of history here . . .

and the fed doesn't affect social security/fica rates, congress does.

While Poppy Bush was president, he didn't think he had enough money to slosh thru to fill
his needs and HE OPENLY FLOATED THE IDEA THAT THE GOVERNMENT SHOULD PUT MORE PRESSURE ON
POOR PEOPLE TO RAISE MORE IRS/TAX MONEY making more money available for his purpose.

The public was shocked at this notion and his idea was shot down quickly.

GREENSPAN .... Chairman of the FED, then came up with the idea that they should INCREASE
the FICA rates making more Social Security SURPLUS funds available to the administration...
and that's what they did in the middle of the night!

I don't know that the fed arrangement is ideal, but i shudder to think of where our economy would be right now if shrub had more direct control over the printing of money!

Where do you get the idea that GOP presidents aren't pushing the FED for decisions in their
favor????

Or that the FED Chairman appointed by GOP presidents isn't cooperating???

The idea is that economic policy should be set by your elected officials ---

ELECTED BEING THE OPERATIVE WORD . . . !!!

[unblock]

12. ....

money is printed by the treasury: http://www.bep.treas.gov/

the fed is NOT PRIVATE. your sources are just plain wrong. it is a govermnet entity and while it has some independence it is still clearly a goverment entity and not a private one.

just because greenie happened to be chairman of the fed when he came up with a stupid idea doesn't mean that "the fed" did jack. social security/fica rates are not controlled by the fed. if *i* have an idea and manage to convince president obama to do it, it doesn't mean that i control anything; president obama will be the one with power, and is free to get his ideas from me or the fed chairman or anyone else.

if the fed were completely in the hands of the bushies, then they would be hyperstimulating the economy like crazy right now in order to get mclame elected. then they would clamp it down to kill inflation. instead they're letting it languish, which helps obama. now i'm not saying that fed officials don't have biases, greenie certainly did, but at least they have some independence, which i don't think is necessarily a bad thing.

do you think supreme court justices should be elected also? is it oh so bad that they are appointed?

[defendandprotect]

13. Does your dollar bill say "FEDERAL RESERVE NOTE" . . . ????

And as for the FICA rates which moved the greatest burden of taxation onto the shoulders

of the poor and middle class, evidently you don't understand political power . . .

which is what your ELECTED officials are supposedly exerting in your interests in Congress.