Central Bank

BERLIN -- Germany's central bank cut its discount rate half a point yesterday, to 7.5 percent, responding to European complaints that the bank has inhibited economic growth at a time when stimulation is needed.In a terse statement after its morning meeting yesterday, the Bundesbank said the move "continued its policy of step-by-step lowering of the interest rates."In November and February, the bank eased its discount and Lombard rates, the rates banks pay in borrowing money from the central bank.

WASHINGTON - Donald Kohn, the second-highest ranking official at the Federal Reserve, announced Monday that he will leave at the end of June, giving President Barack Obama a chance to put a bigger imprint on the central bank. Kohn, vice chairman, has played a major role in shaping the Fed's strategy in fighting the worst financial and economic crises to hit the country since the Great Depression. His departure will open up a third seat on the seven-member Federal Reserve board in Washington.

WARSAW, Poland -- President Lech Walesa has asked Parliament to dismiss the head of Poland's central bank in the wake of a growing corruption scandal.Polish television said that Mr. Walesa asked the Sejm, Parliament's lower house, to fire Grzegorz Wojtowicz as the president of the National Bank of Poland for "lack of supervision" of Poland's banking operations.This week police detained the National Bank's first deputy president, Wojciech Prokop, who was until February first deputy head of the PKO BP, Poland's largest savings bank, and five other people, four of them banking officials, for alleged "financial irregularities."

The Senate, putting market stability ahead of populist anger at Wall Street, voted Thursday to give Federal Reserve Chairman Ben S. Bernanke a second four-year term as head of the nation's central bank. The 70-30 vote was a hard-won victory for President Barack Obama, who had waged an intensive lobbying campaign over the past week to sway rebellious senators who threatened to block the nomination of a Bush-era holdover whom they considered an emblem of failed economic policy. The vote was bipartisan, but it was still the smallest vote margin for a Fed chairman in the central bank's nearly century-long history, reflecting the intense public backlash in the wake of the worst economic crisis since the Depression.

MOSCOW -- While Boris N. Yeltsin toured St. Petersburg yesterday in an attempt to drum up public support for his economic shock therapy, his chief U.S. adviser fired on the Russian president's critics.Harvard economist Jeffrey Sachs blamed much of Russia's economic troubles on its Parliament and Central Bank.But, he said, even if the bank, Parliament and the government all find a way to act together, there is no quick end to the crisis:"There will be industrial crisis in this country for years to come because industry was not created for human needs but for the military-industrial complex.

Frankfurt, Germany -- Despite Europe's plans for a single market, a single currency and a single central bank, its financial capitals are battling in a bid for dominance.At the heart of the struggle is the belief that Europe's pending integration means only one city -- Frankfurt, London or Paris -- will survive as a major financial center. Although London is ahead in the race, Frankfurt is scrambling to win what Germans believe is their rightful place as the European Community's financial and economic heart.

WASHINGTON -- The Federal Reserve decided yesterday to keep interest rates steady even as it stared an abundance of future economic uncertainty in the face. Holding its benchmark short-term interest rate at 5.25 percent for the second straight meeting, the nation's central bank issued a skimpy analysis of the economy that left few clues as to its next move, suggesting its members are uncertain about the outlook. The vote was 10-1 in favor of standing pat, with Jeffrey Lacker, head of the Richmond Federal Reserve Bank, dissenting.

WASHINGTON -- The Federal Reserve faces enormous pressure to reduce interest rates on Tuesday as the economy appears to be taking a turn for the worse, chiefly because of a housing-induced credit crunch that largely caught the central bank by surprise. The Fed's credibility with financial markets and the American people is on the line. Both Wall Street and Main Street expect it will reduce interest rates at least by one-quarter of a percentage point, and perhaps more, to ease credit conditions.

TOKYO -- Business confidence in Japan has rapidly deteriorated in the past three months and has reached the lowest level in five years, the Bank of Japan said last week.Economists said the report, reflecting a survey of business sentiment, indicated that a rebound of Japan's sagging economy, which optimists had expected to begin this summer,would be delayed, perhaps until next year.The survey results reported Friday were worse than expected, said Robert Alan Feldman, director of economic research for Salomon Brothers in Tokyo.

WASHINGTON - -With the recession easing, the Federal Reserve reached a new milestone Wednesday after two years of unprecedented intervention in the economy: It began the pullback. The central bank said that in October it will wind down a program to purchase U.S. government bonds, a first step in what could be a multiyear high-wire act. The Fed wants to remove its supports for the economy soon enough to prevent inflation but not so soon that the fragile recovery is quashed. After a two-day meeting, Fed policymakers pointed Wednesday to evidence that "economic activity is leveling out."

WASHINGTON - -With the recession easing, the Federal Reserve reached a new milestone Wednesday after two years of unprecedented intervention in the economy: It began the pullback. The central bank said that in October it will wind down a program to purchase U.S. government bonds, a first step in what could be a multiyear high-wire act. The Fed wants to remove its supports for the economy soon enough to prevent inflation but not so soon that the fragile recovery is quashed. After a two-day meeting, Fed policymakers pointed Wednesday to evidence that "economic activity is leveling out."

WASHINGTON -The Federal Reserve said yesterday that it will deploy an additional $1.2 trillion to try to lower interest rates and stimulate the economy, an aggressive move aimed at containing the recession. The central bank will increase its purchases of mortgage-backed securities by $750 billion, on top of a previously announced $500 billion. It also will double its purchases of debt in Fannie Mae and Freddie Mac to $200 billion. Those steps are intended to lower mortgage rates - analysts expect the rates will fall 0.25 to 0.50 percentage points as soon as today.

Safeway stores offering some antibiotics free Safeway Inc. yesterday became the latest area grocer to offer some prescription antibiotics for free. The program, which covers up to a 14-day supply of nine generic antibiotics, is in affect until March 31. Safeway is among grocers around the country offering the antibiotics program in an attempt to lure customers. Giant Food and Wegmans Food Markets Inc. also offer free antibiotics. Andrea K. Walker 10 tech companies get $750,000 from TEDCO The Maryland Technology Development Corp.

WASHINGTON - The Federal Reserve slashed its benchmark interest rate yesterday to a record low as part of its continuing battle against the financial crisis and the recession. The central bank cut its target for the federal funds rate - the rate paid by banks to other banks for overnight loans - from 1 percent to a range of 0 percent to 0.25 percent. The Fed indicated that the rate would stay low for some time. The reduction was bigger than expected and sent the stock market up sharply.

The Federal Reserve is expected to take steps today aimed at persuading banks that have received more than $250 billion in bailout funds to begin recycling more of that money back into the economy. But the signs are not hopeful. Economists expect the central bank to lower the cost of borrowing money from the government overnight by at least a half-percentage point to just 0.5 percent. But the Fed has reduced this rate time and again, from 4.25 percent to 1 percent since September 2007, and still the recession deepens.

WASHINGTON - In the largest single financial intervention in the nation's history and a measure of the depths of America's financial crisis, the Federal Reserve will lend insurance giant American International Group Inc. $85 billion to finance the company's liquidation over the next two years, people familiar with the decision said last night. The loan represents an abrupt turnaround for the Fed, which as late as Monday night indicated that the nation's big investment banks would provide emergency financing for AIG and as recently as last weekend appeared to be signaling an end to government rescues of private firms by allowing Lehman Bros.

WASHINGTON -- The Federal Reserve, for all its power, faces tough new limits on its ability to keep the economy out of a recession. Even though the Fed slashed short-term interest rates twice in January, home mortgage rates have edged up steadily in the past few weeks and credit for businesses is as tight as it was when financial markets seized up in August. Yesterday, the central bank, led by Ben S. Bernanke, found itself facing hints of a problem the United States has not seen in decades: stagflation, the mix of slumping growth, sharp spikes in oil and food prices and a rising pace of overall inflation.

WASHINGTON -The Federal Reserve said yesterday that it will deploy an additional $1.2 trillion to try to lower interest rates and stimulate the economy, an aggressive move aimed at containing the recession. The central bank will increase its purchases of mortgage-backed securities by $750 billion, on top of a previously announced $500 billion. It also will double its purchases of debt in Fannie Mae and Freddie Mac to $200 billion. Those steps are intended to lower mortgage rates - analysts expect the rates will fall 0.25 to 0.50 percentage points as soon as today.

WASHINGTON -- The Federal Reserve is poised to aggressively lower interest rates again today, perhaps by as much as 1 percentage point, as it continues its efforts to ease a major credit crunch and serve as a virtual safety net for Wall Street investment bankers. With fear gripping Wall Street, the Fed is trying to stave off a repeat of the collapse of investment banking giant Bear Stearns Cos., which prompted an emergency rate cut Sunday and the move to help arrange a deal to sell the well-known firm to JPMorgan Chase & Co. at the rock-bottom price of $2 a share.