A Financial Timeline

Frequently Asked Questions about the Financial Crisis

How has the financial crisis affected the Fed’s monetary policy?

The financial crisis has interfered with the Fed's ability to operate a conventional monetary policy. Lender-of-last-resort measures have been a primary focus. The FOMC has reduced its target for t...

With the federal funds rate near zero, is monetary policy still relevant?

Monetary policy remains potent. Even with the fed funds rate at zero, the Fed can continue to influence financial markets and the economy through open market operations and various lending programs...

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Recent News

The Federal Reserve and the U.S. Treasury issue a joint statement on the appropriate roles of each during the current financial crisis and into the future, and on the steps necessary to ensure financial and monetary stability. The four points of agreement are 1) The Treasury and the Federal Reserve will continue to cooperate in improving the functioning of credit markets and fostering financial stability; 2) The Federal Reserve should avoid credit risk and credit allocation, which are the province of fiscal authorities; 3) The need to preserve monetary stability, and that actions by the Federal Reserve in the pursuit of financial stability must not constrain the exercise of monetary policy as needed to foster maximum sustainable employment and price stability; and 4) The need for a comprehensive resolution regime for systemically critical financial institutions. In addition, the Treasury will seek to remove the Maiden Lane facilities from the Federal Reserve's balance sheet.

The U.S. Treasury Department purchases a total of $80.8 million in preferred stock from 10 U.S. banks under the Capital Purchase Program.

The U.S. Department of the Treasury announces an Auto Supplier Support Program that will provide up to $5 billion in financing to the automotive industry. The Supplier Support Program will provide selected suppliers with financial protection on monies ("receivables") they are owed by domestic auto companies and the opportunity to access immediate liquidity against those obligations. Receivables created with respect to goods shipped after March 19, 2009, will be eligible for the program. Any domestic auto company is eligible to participate in the program. Any U.S.-based supplier that ships to a participating auto manufacturer on qualifying commercial terms may be eligible to participate in the program.

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