During the 2007-2009 financial crisis,what actions did the Fed take to limit the scope of the crisis?
A) The Fed lowered the spread on the discount rate to 50 basis points, and then to 25.
B) The Fed set up the Term Auction Facility to provide further liquidity to banks.
C) The Fed purchased assets of Bear Stearns to facilitate the purchase of Bear Stearns by J.P. Morgan.
D) all of the above.

Question

Quizplus · Accepted Answer

The Fed took all of these actions during the 2007-2009 financial crisis. Lowering the spread on the discount rate helped to provide cheaper access to short-term credit for banks. The Term Auction Facility provided additional liquidity to banks in need of short-term loans. The Fed's purchase of assets from Bear Stearns helped to facilitate its purchase by J.P. Morgan and prevent its collapse from causing wider financial turmoil.

During the 2007-2009 Financial Crisis,what Actions Did the Fed Take