Financial Times FT.com

Fed mulls options in tackling liquidity problem

By Krishna Guha in Washington

Published: September 12 2007 20:30 | Last updated: September 12 2007 20:30

As Federal Reserve policymakers look ahead to next week’s decision on interest rates, staff at the central bank are continuing to work on other potential steps that could be taken to address liquidity problems in financial markets.

The possible steps range from the relatively orthodox – a disproportionately large cut in the discount rate at which the Fed lends directly to banks – to more unorthodox measures.

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