March 23, 2008	Sunday	Rabi-ul-Awwal 14, 1429

LONDON/WASHINGTON, March 22: The Federal Reserve and Bank of England denied a report on Saturday that they were in talks over possibly using public funds to make mass purchases of mortgage-backed securities to ease the global credit crisis.

However, the Bank of England said it was considering a number of other, unspecified options to address the turmoil in financial markets, which has continued despite the injection by central banks of billions of dollars of liquidity and cuts in interest rates.

The Financial Times, without citing sources, said central banks on both sides of the Atlantic were in talks about the feasibility of buying up mortgage-backed securities — key financial instruments which have plunged in value in recent months, wreaking havoc on banks’ balance sheets and shares.

“Central banks, including the Bank of England, have been looking at ways to ease the strain,” a BoE spokesman said. “The BoE is not, however, among those reported today to be proposing schemes that would require the taxpayer, rather than the banks, to assume the credit risk.” “We can, however, confirm that we have been examining a number of other options. But it is too early to go into any detail,” the spokesman said.

A senior Fed official said: “The Federal Reserve is not involved in discussions with foreign central banks for coordinated buying of MBS (mortgage-backed securities).”—Reuters