Victory State Bank Sheds Light On Interest Rates

STATEN ISLAND, N.Y. -- In today’s blog, Victory State Bank is focusing on the reasons behind current low interest rates.

The financial crisis that began in 2007 was the most intense period of global financial strains since the Great Depression, and it led to one of the deepest and most prolonged global economic downturns in history.

“Why are interest rates being kept at a low level?” is one of the most frequently asked questions posed to the Federal Reserve (http://www.federalreserve.gov/).

The Federal Reserve, the central bank of the United States, answers the question as follows:

The Federal Reserve took extraordinary actions in response to the financial crisis in order to help stabilize the U.S. economy and financial system.

These actions included reducing the level of short-term interest rates to near zero.

To provide further support for the U.S. economy, the Federal Reserve has purchased large quantities of longer-term Treasury and other high-quality securities in an effort to further reduce longer-term interest rates.

Low interest rates help households and businesses finance new spending and help keep the prices of many other assets, such as stocks and houses, steady.

By law, the Federal Reserve conducts policy to achieve its dual mandate of maximum employment and stable prices.

Although the economic outlook is much improved from the period of the crisis, the unemployment rate remains high and underlying inflation is somewhat low.

In this environment, the Federal Reserve has determined that an accommodative stance of policy with low interest rates is necessary to help promote a stronger pace of economic recovery and to help ensure that underlying inflation does not move even lower over the medium term.

About Victory State Bank:

VSB Bancorp, Inc. (NASDAQ: VSBN) is the one-bank holding company for Victory State Bank. As Staten Island, N.Y.’s only community-based commercial bank, Victory State Bank operates five full-service locations on the Island: The main office in the community of Great Kills, and branches in the communities of West Brighton, St. George, Dongan Hills and Rosebank. For additional information, Victory State Bank may be reached at 718-979-1100 or visited online http://www.victorystatebank.com .

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