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US starts banks pull-out

Chairman of the US Federal Reserve, Ben Bernanke, has begun to outline a strategy for withdrawing its stimulus packages to the country's banks.

The Fed has greatly expanded the credit available to banks to encourage lending to deal with the economic crisis.

One suggestion for reducing the money supply included in Mr Bernanke's statement to a Congressional committee was to pay the banks a higher interest rate on certain deposits at the Federal Reserve which should lead to tighter credit conditions and higher interest rates.


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