Fed Considers Plan to Buy Companies’ Unsecured Debt

By EDMUND L. ANDREWS and MICHAEL M. GRYNBAUM
Published: October 6, 2008

WASHINGTON — The Federal Reserve announced a radical new plan on Tuesday to jump-start the engine of the financial system.

The Fed said in a statement that it would begin to buy large amounts of short-term debt in an effort to stimulate the credit markets, which have all but dried up.

Under the program, the Fed said that it would buy the unsecured short-term debt that companies rely on to finance their day-to-day activities. “This facility should encourage investors to once again engage in term lending in the commercial paper market,â€