Massachusetts Asks About Federal Loan Amid Market Worries [View All]

[DeepModem Mom]

Source: NYT/AP

BOSTON (AP) -- The treasurer of Massachusetts has asked the federal government about lending Massachusetts money under the same favorable terms it has given banks and firms during the financial crisis.

Treasurer Timothy Cahill's requests to the U.S. Treasury and Federal Reserve Bank of Boston this week were prompted by the state's inability to borrow from the short-term debt markets, The Boston Globe reported Saturday. The financial turmoil has caused credit markets to stop lending, or to charge prohibitive rates.

California has made a similar request, saying it would run out of money by the end of the month if the short-term debt markets do not ease. The state asked whether it could not obtain loans from the Fed.

Massachusetts has enough money to cover its expenses for the coming weeks, Cahill said. But a low-rate loan would ease a cash shortfall if the credit problems persist.

''That's all we would ask them to do: Treat us like the investment banks,'' Cahill said. Federal officials have not responded to his request, Cahill said Friday....

Read more: http://www.nytimes.com/aponline/us/AP-Credit-Concerns.html