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Federal Reserve Policies during the 2007-2009 Recession definitions

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이 집합의 용어 (15)

  • Monetary Policy
    Actions by a central bank to influence money supply and interest rates, often used to stabilize financial systems during crises.
  • Mortgage-Backed Securities
    Financial instruments created by bundling home loans, offering returns based on mortgage payments but carrying risk if borrowers default.
  • Liquidity
    Availability of cash or easily convertible assets, crucial for banks to meet obligations and prevent insolvency during financial turmoil.
  • Discount Loans
    Low-interest, short-term funds provided by a central bank, typically to commercial banks but extended to investment banks in emergencies.
  • Investment Banks
    Financial institutions specializing in securities trading and underwriting, heavily exposed to mortgage-backed securities during the recession.
  • Treasury Securities
    Government-issued debt instruments considered safe, used as collateral to enhance bank liquidity during the financial crisis.
  • Bear Stearns
    Major investment bank whose near-collapse prompted government intervention to prevent wider financial panic.
  • JPMorgan Chase
    Investment bank that acquired Bear Stearns with government assistance, helping to stabilize the financial sector.
  • Fannie Mae
    Government-sponsored enterprise involved in purchasing mortgages, taken over to maintain confidence in mortgage markets.
  • Freddie Mac
    Public entity supporting mortgage markets, whose government takeover aimed to prevent further erosion of market stability.
  • Lehman Brothers
    Investment bank allowed to fail during the recession, illustrating the risks of moral hazard in government bailouts.
  • Moral Hazard
    Situation where entities take excessive risks, expecting government rescue, potentially encouraging future reckless behavior.
  • Troubled Asset Relief Program
    Federal initiative injecting capital into banks in exchange for ownership stakes, designed to prevent deeper economic losses.
  • Market Equilibrium
    State where supply and demand balance, disrupted during the recession by failing financial institutions and asset devaluation.
  • Externalities
    Unintended side effects of economic actions, such as widespread financial instability impacting the broader economy.