Fed agrees new rules to limit emergency bailout powers

Provided $710bn during 2008 crisis

The Federal Reserve has agreed to new rules meaning at least five firms have to be rescued in the event of a bailout rather than single entities.

According to The Telegraph, the rule change came following pressure from lawmakers who felt the US central bank's bail out of firms during the financial crisis went too far and was not the intended use of its emergency powers. In 2008, the Federal Reserve bailed out numerous banks, previously branded as 'too big to fail', including Citigroup and Bank of America and provided $710bn in loans and guarantees. Yellen: Rate rise on track for 2015 The new rules will allow emergency credit to be extended only through broad-based facilities and programmes designed to improve liquidity. B...