Big Banks Cut Prime Rate to 8%

The nation’s biggest banks today cut their prime interest rate from 8.5% to 8%, setting the benchmark rate at its lowest level in eight years in response to the Federal Reserve Board’s reduction of the discount rate.

Chemical Bank of New York led the way this morning, and major banks from coast to coast followed in announcing the prime rate cuts the day after the Fed trimmed the discount rate from 6.5% to 6%. (Story on Page 4.) The prime is a benchmark used by banks in setting rates on loans to businesses, and generally mirrors broad trends in interest rates.