Guarantees and Capital Infusions in Response to Financial Crises B: U.S. Guarantees During the Global Financial Crisis

Yale Program on Financial Stability Case Study 2015-3B-V1

16 Pages Posted: 30 Jan 2016

See all articles by June Rhee

June Rhee

Yale University - Yale Program on Financial Stability; Harvard Law School; Yale University - Yale Program on Financial Stability

Andrew Metrick

Yale School of Management; National Bureau of Economic Research (NBER); Yale University - Yale Program on Financial Stability

Date Written: July 15, 2015

Abstract

During 2008-09, the federal government extended multiple guarantee programs in an effort to restore the financial market and contain the panic and crisis in the market. For example, the Treasury provided a temporary guarantee program for the money market funds, the FDIC decided to stand behind certain debts and non-interest bearing transaction accounts, and the Treasury, the FDIC and the Federal Reserve agreed to share losses in certain assets belonging to Citigroup. This case reviews these guarantee programs implemented during the global financial crisis by the government and explores the different rationale that shaped certain design features of each program.

Keywords: Guarantee, Money market fund, Temporary Liquidity Guarantee Program, Debt Guarantee Program, Transaction Account Guarantee Program, Asset Guarantee Program, FDIC, Citigroup

JEL Classification: G01, G18, G28

Suggested Citation

Rhee, June and Metrick, Andrew, Guarantees and Capital Infusions in Response to Financial Crises B: U.S. Guarantees During the Global Financial Crisis (July 15, 2015). Yale Program on Financial Stability Case Study 2015-3B-V1. Available at SSRN: https://ssrn.com/abstract=2723479 or http://dx.doi.org/10.2139/ssrn.2723479

June Rhee (Contact Author)

Yale University - Yale Program on Financial Stability ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

Harvard Law School ( email )

1563 Massachusetts Ave
Cambridge, MA 02138
United States

Yale University - Yale Program on Financial Stability

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States

Andrew Metrick

Yale School of Management ( email )

165 Whitney Avenue
New Haven, CT 06511
United States
(203)-432-3069 (Phone)

HOME PAGE: http://faculty.som.yale.edu/andrewmetrick/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yale University - Yale Program on Financial Stability

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States

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