On November 20, 1985, the Bank of New York needed to use the lender of last resort function due to:
A) a run on the bank started by a rumor that the president of the bank embezzled tens of millions of dollars from the bank.
B) a computer error caused the bank's records to wipe out the balances of all of its customers.
C) a rumor that the bank was about to be taken over by FDIC due to insolvency.
D) a computer error that made it impossible for the bank to keep track of its Treasury bond trades.

Question

Quizplus · Accepted Answer

The Bank of New York faced a significant issue on November 20, 1985, due to a computer error that disrupted its ability to process and keep track of its Treasury bond trades. This led to a situation where the bank needed to access emergency funds from the Federal Reserve, effectively using the lender of last resort function to manage its liquidity crisis.

On November 20, 1985, the Bank of New York Needed