California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

The Federal Reserve cut a key interest rate by a half percent, striving to steady
the reeling financial markets just days after President Bush signed a $700 billion
bailout. The Federal Reserve lowered its benchmark federal funds rate by half a
percentage point to 1.5 percent.

It is the latest in a long series of actions the Fed has taken in coordination with
other federal agencies, Congress and the White House to try to shore up a financial
industry that has been rocked by bad debt, losses and failures.

The Bank of England also cut the base lending rate by half a point to 4.5 percent. 
In addition, the Bank of Canada, the European Central Bank and the Swiss National
Bank all announced the reductions. The Bank of Japan is also expressing strong
support of these policy actions.

By cutting rates in coordination, the central banks in the United States, Britain,
Switzerland, Canada and Sweden can encourage new lending between banks globally
without risking that the banks will move their capital to countries that keep their rates
at higher levels.

I am Tim Johnson and this has been the California Business Minute.