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The Federal Reserve responds to crises: September 11th was not the first

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Abstract

A primary purpose of the Federal Reserve Act of 1913 was to prevent banking panics by establishing the Federal Reserve System to function as a lender of last resort. Other types of financial crisis require a similar response, however, and the Federal Reserve has repeatedly used its capacity to generate liquidity to insulate the economy from crises in financial markets. The Fed?s response to the terrorist attacks of September 11, 2001, is the most recent example of this. This paper reviews the Fed?s responses to crises and potential crises in financial markets: the stock market crash of 1987, the Russian default, and the September 11th attacks.

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  • Christopher J. Neely, 2004. "The Federal Reserve responds to crises: September 11th was not the first," Review, Federal Reserve Bank of St. Louis, vol. 86(Mar), pages 27-42.
    • Handle: RePEc:fip:fedlrv:y:2004:i:mar:p:27-42:n:v.86no.2
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    Cited by:

    1. Steven Wei Ho & Ji Zhang & Hao Zhou, 2018. "Hot Money and Quantitative Easing: The Spillover Effects of U.S. Monetary Policy on the Chinese Economy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 50(7), pages 1543-1569, October.
    2. Charles Gerena, 2006. "Federal Reserve : Initiation by fire," Econ Focus, Federal Reserve Bank of Richmond, vol. 10(Fall), pages 2-5.
    3. Khalid Rashid Alkhater & Syed Abul Basher, 2016. "The oil cycle, the Federal Reserve, and the monetary and exchange rate policies of Qatar," Middle East Development Journal, Taylor & Francis Journals, vol. 8(1), pages 127-155, January.
    4. Schüder, Stefan, 2011. "Monetary policy trade-offs in a portfolio model with endogenous asset supply," University of Göttingen Working Papers in Economics 127, University of Goettingen, Department of Economics.
    5. Ho‐fung Hung, 2022. "The Virus, the Dollar, and the Global Order: The COVID‐19 Crisis in Comparative Perspective," Development and Change, International Institute of Social Studies, vol. 53(6), pages 1177-1199, November.
    6. Daniel L. Thornton, 2009. "The Fed, liquidity, and credit allocation," Review, Federal Reserve Bank of St. Louis, vol. 91(Jan), pages 13-22.
    7. repec:got:cegedp:127 is not listed on IDEAS
    8. Christopher J. Neely, 2024. "The economic effects of a potential armed conflict over Taiwan," Working Papers 2024-034, Federal Reserve Bank of St. Louis.
    9. Benjamin D. Keen & Michael R. Pakko, 2011. "Monetary Policy and Natural Disasters in a DSGE Model," Southern Economic Journal, John Wiley & Sons, vol. 77(4), pages 973-990, April.
    10. Schüder, Stefan, 2011. "Monetary policy trade-offs in a portfolio model with endogenous asset supply," MPRA Paper 32019, University Library of Munich, Germany.
    11. Steven Wei Ho & Ji Zhang & Hao Zhou, 2014. "Hot money and quantitative easing: the spillover effect of U.S. monetary policy on Chinese housing, equity and loan markets," Globalization Institute Working Papers 211, Federal Reserve Bank of Dallas.
    12. Sauer, Stephan, 2007. "Three Liquidity Crises in Retrospective: Implications for Central Banking Today," Discussion Papers in Economics 2011, University of Munich, Department of Economics.
    13. Benjamin D. Keen & Michael R. Pakko, 2007. "Monetary policy and natural disasters in a DSGE model: how should the Fed have responded to Hurricane Katrina?," Working Papers 2007-025, Federal Reserve Bank of St. Louis.
    14. Stefan Schueder, 2011. "Monetary Policy Trade-Offs in a Portfolio Model with Endogenous Asset Supply," Working Papers 2011.3, International Network for Economic Research - INFER.
    15. Schüder, Stefan, 2014. "Expansive monetary policy in a portfolio model with endogenous asset supply," Economic Modelling, Elsevier, vol. 41(C), pages 239-252.

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