Even the Federal Bank needs a loan?

clipped from www.telegraph.co.uk US stock markets tumbled on Wall Street as fears spread that the US government's $85 billion (£47 billion) rescue of American International Group (AIG) will fail to put an end to the global credit crisis. Fears that America's central bank – the Federal Reserve – may have over-stretched itself in agreeing to bail out AIG were underlined after the US Treasury announced plans to raise $40bn to allow the Fed to "better manage their balance sheet." Financial markets were also unnerved by a spike in inter-bank lending rates, with the premium paid to buy dollars over a three month period rising sharply, leading to concerns that the supply of credit might be drying up in the global financial system. The unprecedented funding package for the Fed - the $40bn issue being the first in a series of further fundraisings – came at the same time as the head of the International Monetary Fund warned of deeper troubles for the financial system.