Fed works over weekend to shore up ailing US banks

The US Federal Reserve, in an extraordinarly rare weekend move, took bold action to provide cash to financially squeezed Wall Street investment houses, a fresh effort to prevent a spreading credit crisis from sinking the US economy.

The central bank approved a cut in its lending rate to financial institutions to 3.25% from 3.50%, effective immediately, and created another lending facility for big investment banks to secure short-term loans. The new lending facility will be available to big Wall Street firms from today.