Five years after the 2007-2008 financial crisis, the Federal Reserve is providing an inside glimpse of how it kept financial markets from collapsing, averting the worst economic crisis since the Great Depression.
The Federal Reserve on Friday released transcripts of more than a dozen policy meetings beginning in January 2008, when then Federal Reserve Chief Ben Bernanke and other Fed officials candidly expressed fears that the economy was continuing to slide, investment banks remained at risk of failing and the financial fallout was spreading from financial sector stocks to global markets and economies.
The transcripts, which cover Fed discussions through December 2008, are the most intimate look at how Fed officials were dealing with the crisis in real-time and the debate over how best to help investments banks and protect the economy - from continued cuts in interest rates to bailouts of troubled investment banks, such as Lehman Bros. It's also clear from hundreds of pages of Fed transcripts that officials faced a crisis that may have been deeper, more widespread and more problematic to solve that previously disclosed.
"The data have been on the whole negative,'' Bernanke said at a Federal Open Market Committee conference call. "The markets in part are suffering from just simple uncertainty about whether the Fed is willing to be proactive in addressing downside risks."