Randomness (r_ness) wrote,

And in other financial news...

...the world's central banks finally signaled that they've bought a clue and are making a coordinated emergency cut in interest rates.

The US Federal Reserve, the European Central Bank, the Bank of England, the Bank of Canada, and Sweden's Riksbank have all cut rates by 50 basis points, or 1/2 percent. The Swiss National Bank cut its interest rates by 25 basis points, and the People's Bank of China cut rates by 27 basis points. The Reserve Bank of Australia had already cut rates yesterday by a full percentage point, while the Bank of Japan's rate is so low already, at a half percent, that they could only "express their strong support" for the action.

In the short term this move is mostly symbolic, as it takes months for rate cuts to affect the economy, but the concerted action is meant to reassure markets that the central banks really do understand that something bad is happening. For some of these banks, that understanding's been a long time coming.

Edit: The Hong Kong Monetary Authority also cut its lending rate by a full percent.

Re-Edit: The Bank of Korea and the Central Bank of the Republic of China (Taiwan) each cut by 25 basis points the next day, along with Hong Kong.
Tags: money
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