New York — Big banks raise key interest rate
Several large money-center banks, including giant Citibank and Chase Manhattan, boosted their prime rates Thursday to 12 percent from 111/2 percent, the highest level for the key lending rate in almost 11/2 years.
First National Bank of Chicago took the lead and was immediately followed by Pittsburgh's Mellon Bank and Citibank, Chase, and Chemical of New York. It was the highest level for the prime rate since November 1982, when banks lowered the prime to 111/2 percent from 12 percent.
The move, which had been widely predicted by Wall Street economists, came in the wake of a sharp rise in the cost of bank money and roughly three weeks after banks raised the prime to 111/2 percent.