NEW YORK — ee of the nation's four biggest banks joined the fourth this morning when they cut their prime lending rates by half a percentage point to 9 1/2%, a delayed response to looser federal credit policies meant to stimulate the slow economy.
The announcements by the New York-based Citibank, the nation's largest bank; Chase Manhattan Bank, the second largest, and fourth-ranked Morgan Guaranty Trust Co. of New York came two days after No. 3 Bank of America said it is cutting the key loan rate as of today by the same amount.
Also trimming its prime rate today was seventh-ranked NCNB Corp. of Charlotte, N.C.
The prime rate is a widely used bench mark for calculating loans to businesses and for determining many types of fixed- and adjustable-rate consumer loans. A wide-ranging cut in the prime signals that interest rates for these loans are easing, which theoretically will stimulate more consumers to borrow money for purchases ranging from cars to homes.