Fed lays groundwork for term deposit facility

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WASHINGTON | Mon Dec 28, 2009 2:00pm EST

WASHINGTON Dec 28 (Reuters) - The U.S. Federal Reserve on Monday proposed creating a "term deposit facility" that it could use to withdraw money from the banking system to help tighten monetary policy.

"The proposal is one component of a process of prudent planning on the part of the Federal Reserve and has no implications for monetary policy decisions in the near term," the Fed said in a statement.

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