The nation's largest banks boosted their prime rates to 8.5%, from 8.25%, in response to Tuesday's decision by the Federal Reserve to increase its benchmark overnight lending rate by a quarter point.

Chase Manhattan Corp., Pittsburgh-based PNC Bank Corp., J.P. Morgan & Co. subsidiary Morgan Guaranty Trust Co., First Chicago NBD Corp., Bank of Boston Corp., NationsBank Corp., Bankers Trust New York Corp., and Mellon Bank Corp. all raised their prime rates Wednesday.

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