A Brief History of the 1987 Stock Market Crash With a Discussion of the Federal Reserve Response
25 Pages Posted: 26 Apr 2007
Date Written: April 2007
The 1987 stock market crash was a major systemic shock. Not only did the prices of many financial assets tumble, but market functioning was severely impaired. This paper reviews the events surrounding the crash and discusses the response of the Federal Reserve, which responded in a number of ways to support the operation of financial markets, including the provision of liquidity, in a highly visible fashion.
Keywords: lender of last resort, financial stability, Federal Reserve, stock market crash
JEL Classification: E58, G18, N22
Suggested Citation: Suggested Citation