- Before the economic recession, the Federal Reserve cut interest rates 8 times since the beginning of 2001, bringing the rate to 3%. This is one of the fed timely action to reassure the people and the business world after the terrorist attack, stimulate the economy escape difficult times. Earlier on September 12, 2001, fed and pumped some 38.25 billion dollars amounting to US banking system to maintain the smooth flow of cash, and fed also declared ready to pump more money if necessary. After the action of the fed cut interest rates, the European Central Bank also unexpectedly cut interest rates by 0.5% for the third time. This stimulates the growth of real estate sector and the construction industry as a driving force for economic growth. In the easy credit environment, the group financial chwucs tend to risky borrowers, including those of illegal immigrants loan.
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