Economic Stimulus, Banks | featured news

The central bank affirmed that it would keep up its existing efforts to stimulate the economy, even though it expected a return to moderate growth.

The Federal Reserve, hoping to give another shot in the arm to the pallid recovery, announced it would launch a new round of a controversial bond-buying stimulus program. The central bank also further extended its pledge to keep short-term interest rates near zero, now through the middle of 2015.

A growing number of small and medium-sized banks are merging as shrinking profit margins, tepid loan demand and low interest rates place pressure on their operations. Conditions are unlikely to improve as the Federal Reserve contemplates another round of stimulus that could push rates even lower.

A provision buried in the stimulus bill would impose restrictions on executive bonuses at companies reaping bailout money.