Second day of intervention

Another day, another 61.05 billion euros. Something is definitely going on.

The ECB, the US Federal reserve, the Canadian central bank, the Japanese central bank and the Austrialian central bank are all putting in liquidity. Central banks in the Philippines, Indonesia and South Korea said they are ready to provide more cash if required.

UPDATE

Via samizdata comes the reason for why there was this sudden urge to lend to people that where before deemed too risky.

Politicians have also been a key factor behind pushing lenders to lend to borrowers with lower prospects of being able to repay their loans.

The Community Reinvestment Act lets politicians pressure lenders to make loans to people they might not lend to otherwise - and the same politicians are quick to cry "exploitation" when the interest charged to high-risk borrowers reflects that risk.

The huge losses of subprime lenders, some of whom have gone bankrupt, demonstrate again the consequences of letting politicians try to micro-manage the economy.