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10 - How Risky Were the Fed’s Rescues of Other Firms?

Published online by Cambridge University Press:  04 June 2018

Laurence M. Ball
Laurence M. Ball
Affiliation:
The Johns Hopkins University
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Summary

Fed officials have asserted that the institutions it did assist had better collateral than Lehman, and therefore it was safer to lend to them. In fact, collateral values were highly uncertain when the Fed lent to facilitate the acquisition of Bear Stearns by JPMorgan Chase and to support AIG. In these cases, the Fed took on more risk than it would have if it provided liquidity support to Lehman
Type
Chapter
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The Fed and Lehman Brothers
Setting the Record Straight on a Financial Disaster
 , pp. 177 - 194
Publisher: Cambridge University Press
Print publication year: 2018

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