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Business Round-Up

Published on Sunday, August 9, 2009 Email To Friend    Print Version


Mervyn King


BOE extends bond purchases

(Bloomberg) – The Bank of England expanded its bond purchase program beyond its original limit in an effort to spur lending and fight a recession that’s deeper than previously anticipated.

Bond yields plunged after the Monetary Policy Committee, led by Governor Mervyn King, kept the key interest rate at 0.5 percent and increased its purchase program by 50 billion pounds ($84 billion) to 175 billion pounds.

The Bank of England’s move suggests policy makers, who based the decision on quarterly forecasts prepared this month, assessed that their stimulus plan and record low interest rates weren’t enough to quell the threat of deflation.

Fannie Mae to tap $10.7B

(Bloomberg) – Fannie Mae, operating under a federal conservatorship, asked the U.S. Treasury for a $10.7 billion capital investment as its eighth straight quarterly loss once again drove the mortgage-finance company’s net worth below zero.

A second-quarter net loss of $14.8 billion, or $2.67 a share, pushed the company to request its third draw on a $200 billion lifeline from the government, Washington-based Fannie Mae said in a filing today with the Securities and Exchange Commission.

The company, which posted $86.8 billion in losses over the previous seven quarters, has already taken $34.2 billion in federal aid since April.

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