Fed Loans Guided by Raters Grading Subprime Debt AAA (Update1)
Email | Print | A A A

By Alison Fitzgerald

Dec. 18 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke is basing hundreds of billions in emergency lending on credit ratings from companies that gave AAA grades to toxic securities.

The Fed has purchased $308.5 billion in commercial paper and lent $631.8 billion under eight credit programs, most of which require appraisals of short-term debt and loan collateral by “major nationally recognized statistical ratings organizations.â€