To inject money
What is to inject money?
The USA is suffering an important real estate crisis. During the year 2006 half of the mortgage loans that were formalized did not bear in mind the suitable forecasts with regard to the solvency of the petitioners of the credit, to be able to pay the interests of the loans and the amount of the housings that they were acquiring. These mortgages that grant clients of doubtful solvency to themselves, the called mortgages suboccupy first place or you mortgage garbage, they bear the big risk that these persons could not return the money with the corresponding interests. This provokes slowness and one is afraid that an absence of liquidity exists in the banks and that these turn out to be forced to sell his actions. This would provoke a serious crisis on the stock markets. So that the principal monetary authorities have done; the European Central Bank (BCE), other central banks and the American Federal Reservation has been to inject money or to inject liquidity.
To inject money means to deposit more money on the market across the banking and these institutions to make it come to the citizens. In fact on having injected money, what they do is to give it to him to the banks to a very attractive interest. It is realized across auctions.
With these money injections also one tries to avoid an increase of the interest rates that might be provoked by an absence of liquidity in the banking institutions.
On the other hand, it is not known well which are the banking institutions harmed or related to the American real estate crisis with what many can be extracting party to the crisis and to the injections of money, by what also suspicion is generated.
This procedure only is executed in exceptional circumstances like when on the following day of the offenses of 11-S in the United States the BCE he injected 69.300 million euros.
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