The Federal Reserve as Lender of Last Resort During the Subprime Crisis – Successful Stabilisation Without Structural Changes

Hansjörg Herr (), Sina Rüdiger () and Jennifer Wu
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Hansjörg Herr: Berlin School of Economics and Law (HWR), Germany.
Sina Rüdiger: Berlin School of Economics and Law (HWR), Germany.

Journal of Economics and Political Economy, 2016, vol. 3, issue 2, 192-210

Abstract: This paper studies the actions of the U.S. Federal Reserve Bank (FRB) during the financial crisis from 2007-2012 rating the performance of the Federal Reserve during the crisis. The chosen scoring model approach shows that the average performance of five specific measures taken by the FRB only ranks between fair and good. Comparing Stiglitz (2010) viewpoints with those of the FRB, this paper analyses several policies and events and argues that the resulting decisions were well intentioned but that the outcome was different from expectations because of missing regulations and restrictions. Furthermore, the structure of the FRB is examined and criticized.

Keywords: Asset Bubbles; Federal Reserve Bank; Scoring Model; Financial Crisis; Monetary policy; Regimes of growth. (search for similar items in EconPapers)
JEL-codes: E42 E58 E65 G18 (search for similar items in EconPapers)
Date: 2016
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Working Paper: The Federal Reserve as lender of last resort during the subprime crisis: Successful stabilisation without structural changes (2016)
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