Magazine article American Banker

Bankers Trust Cuts Its Prime to 10.75%

Magazine article American Banker

Bankers Trust Cuts Its Prime to 10.75%

Article excerpt

NEW YORK -- The Bankers Trust Co. lowered its prime rate to 10-1/4% Tuesday, becoming the second major bank to join what is expected to be an industry-wide move to the lower rate.

The Manufacturers Hanover Trust Co., the nation's fourth largest bank, announced a similar move shortly before the stock exchanges closed Monday. As of late Tuesday, however, few other major banks had joined the two New York banks at the 10-1/4% prime.

At 10-1/4%, the prime rate is at its lowest since August 1983, when it rose from 10-1/2% to 11%. The prime rate is traditionally the interest rate charged on loans to a bank's best-rated corporate customers.

News of Tuesday's decline helped spark a market turnaround, which was led by money center bank stocks. By late afternoon, the Dow Jones Industrial Average was up more than 20 points to 1197.55.

This continued a market trend that started Monday afternoon. The market reacted strongly to Manufacturers' cut late in the day and gained more than eight points in the last hour to finish up just under a point from the 1175. …

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