More recently, the financial system as a whole faced significant disruptions after the September 11, 2001, terrorist attacks in New York and Washington D.C. Following the default of the Russian ruble in 1998, which caused the Russian government to halt payments on its foreign debt, the Fed lowered short-term interest rates to help alleviate turbulence caused to the U.S.
During the stock market crash of 1987, when the market plunged more than 20 percent, the Fed provided liquidity to help stabilize financial markets.After the failure of Continental Illinois National Bank, one of the country’s biggest banks, in 1984, the Fed prevented smaller banks with deposits at the large institution from being jeopardized by temporarily loaning $5 billion to Continental Illinois.Although such events occur rarely, the Fed’s actions have played a very important role stabilizing the economic and financial system following various shocks to the economy: economy that are not always visible to the public, though they directly and indirectly affect participants in many financial transactions-which means everyone at some point or another! Occasionally, however, the roles of the Fed become more obvious. central bank, the Fed plays several important roles in the U.S. Yours is a question I wish more people would ask! As the U.S.
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