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New Fed rules to prohibit emergency loans to individual companies

The Federal Reserve said Monday it will adopt new regulations on emergency corporate lending.

Under the new rules, the Fed would prohibit emergency loans to individual companies.

The new regulations also say emergency loans must be made at a penalty rate and also prohibit lending to insolvent firms.

Fed Chair Janet Yellen said the Fed can now only offer broad-based emergency credit.

She also said that, under the new regulations, the central bank would not have been able to bail out Bear Stearns or AIG in 2008.