For immediate release: April 1, 2009
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Dallas Fed Report Details Fed’s Recent Actions to Stabilize Financial System
DALLAS—The unprecedented actions the Fed has taken to combat the financial crisis have had some success in unclogging the economy’s financial arteries, according to the latest issue of the Federal Reserve Bank of Dallas’ Economic Letter.
In “Fed Confronts Financial Crisis by Expanding Its Role as Lender of Last Resort,” vice president and senior policy advisor John V. Duca, financial analyst Danielle DiMartino and research analyst Jessica J. Renier chronicle how the Fed has used long dormant powers in an attempt to stabilize the financial system.
“Providing unconventional liquidity has helped the central bank engineer policy for a modern credit market that has been transformed from a bank-dominated system funded by deposits to one predominantly funded by securities markets,” the authors write.
In the Economic Letter, the authors walk the reader through the various lending facilities created by the Fed as the financial crisis evolved.