As the nation’s central bank, the Federal Reserve usually tries to stimulate the economy by cutting interest rates or giving loans to banks. In 1932, however, the federal government gave the Federal Reserve the authority to loan money to people, partnerships or corporations in “unusual and exigent circumstances.”  The current economic state may qualify, reports the Wall Street Journal’s David Wessel. The Fed – criticized for what some see as a laconic response to the mortgage crisis and subsequent recession – is considering the aforementioned loans along with other “unconventional policy options” like buying mortgage-backed securities directly.  Read Wessel here.

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