Commodity Online
WASHINGTON: In an attempt to contain fast-spreading financial turmoil stemming from the subprime crisis, the U.S. Federal Reserve on Sunday trimmed its discount rate for direct loans to banks by 0.25 percent point to 3.25 percent.

The Fed Board voted unanimously to approve a request by the Federal Reserve Bank of New York to reduce the interest rate the Fed charges banks that borrow directly from the central bank, effective immediately.

Sunday's actions are the latest in a string of unconventional moves the Fed has taken to try to alleviate the credit crisis, which has frozen much of the financial markets and made the Fed's rate cuts less effective in the view of many analysts.

Its new lending facility will be in place for at least six months and may be extended as conditions warrant, the Fed said, will accept a broad range of debt securities as collateral and the interest rate will be the same as the discount rate.

The Fed said it would create a lending facility for financial institutions to secure loans from the New York Fed at the primary credit rate.