Financial Post: US Economy: Economists skeptical of central banks' 'damage control' - by Janet Whitman

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Economists skeptical of central banks' 'damage control' - by Janet Whitman

Amid worries the U.S. credit crunch is dragging the global economy into a recession, a group of major central banks teamed up yesterday with a novel tactic to help spur banks to start lending money again. Investors pounced on the news, sending stock prices soaring.

But many economists expressed doubts about the effectiveness of the plan, in which the U.S. Federal Reserve and other central banks agreed to loan hundreds of billions in dollars to banks in exchange for securities that include bundles of risky home loans as collateral