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Full-Text Articles in Economic Policy
The Commercial Paper Funding Facility (U.S. Gfc), Rosalind Z. Wiggins
The Commercial Paper Funding Facility (U.S. Gfc), Rosalind Z. Wiggins
Journal of Financial Crises
In mid-September 2008, prime money market mutual funds (MMMFs) began experiencing run-like redemption requests sparked by one fund that had “broken the buck” because of large exposure to Lehman Brothers commercial paper (CP). As a result, MMMFs, which are significant investors in CP, became reluctant to hold CP. Within a week, outstanding CP had been reduced by roughly $300 billion. The CP market experienced severe shortening of maturities and increased rates, making it difficult for issuers to place new paper. When government efforts to assist the MMMFs did not resolve the stresses in the CP market, the Federal Reserve announced, …
Guarantees And Capital Infusions In Response To Financial Crises A: Haircuts And Resolutions, June Rhee, Andrew Metrick
Guarantees And Capital Infusions In Response To Financial Crises A: Haircuts And Resolutions, June Rhee, Andrew Metrick
Journal of Financial Crises
After the mortgage market meltdown in mid-2007 and during the financial crisis in 2008, major financial institutions around the world were on the verge of collapsing one after another. Faced with these troubles, the government had to respond quickly to contain the crisis as efficiently as possible. It was, however, limited in resources, time, and experience. To make matters worse, the complexity and opaqueness of the financial market and these institutions greatly affected the government’s ability to design an efficient and consistent method to contain the crisis. Shortly after Lehman Brothers filed for bankruptcy on September 15, 2008, American International …