Journal Article

Case studies on disruptions during the crisis

Abstract: The 2007-09 financial crisis saw many funding mechanisms challenged by a drastic reduction in market liquidity, a sharp increase in the cost of transactions, and, in some cases, a drying-up in financing. This article presents case studies of several key financial markets and intermediaries under significant distress at this time. For each case, the author discusses the size and evolution of the funding mechanism, the sources of the disruptions, and the policy responses aimed at mitigating distress and making markets more liquid. The review serves as a reference on the vulnerabilities of funding structures and is useful for those considering the scope and design of reform efforts.

Keywords: Money market mutual funds; Commercial paper; Wholesale funding; Repo; Dollar swap lines; Asset-backed commercial paper;

JEL Classification: G21; G18; G01; G19;

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Economic Policy Review

Publication Date: 2014

Issue: Feb

Pages: 17-28