Some companies have taken issue with how this stock borrowing program is run, saying it can be used for manipulative purposes.
It also runs a stock borrowing program for member firms that are engaging in short-selling or other market-making activities where borrowing securities becomes necessary.
The new rules require that the President certify the creditworthiness of any nation before it can qualify for the borrowing program, but the rules set no guidelines for determining creditworthiness.
The program should successfully keep borrowing costs low, but the full impact on the economy is unclear.
Midwest Fertilizer Corp. officials estimate they shaved off up to two percentage points, to about 5% from about 7%, borrowing through the disaster-bond program compared with typical commercial financing.
After being down several days in a row, the stock market got a lift Friday from European rumors that the ECB is considering setting yield-band targets in a new bond-buying program to help contain borrowing costs for Greece, Spain, and Italy, and the release of a letter Fed Chairman Bernanke had sent out a few days earlier.
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The objective of the program is to reduce the borrowing costs of state and local governments.
The Fed instead extended its Operation Twist program aimed at keeping long-term borrowing costs low by selling short-term Treasurys and putting the money into long-term bonds.
In 2007, Mount Holyoke College started a similar program, and half the students who received counseling changed their borrowing plans, says Gail W. Holt, a financial-services official at the Massachusetts school.
This will probably take the form of a bond buying program using the Emergency Stability Mechanism and the ECB to help push down borrowing costs via both primary and secondary purchases of Spanish sovereign debt.
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Although in the 2012-2014 fiscal program, the government sees smaller deficits and lower levels of debt and further needs for borrowing, it is no longer based on conservative oil price assumptions.
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If the program is expected to run annual deficits, as it is today, those deficits exist only until the borrowing limit is reached.
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