A Brief History of the 1987 Stock Market Crash With a Discussion of the Federal Reserve Response

Carlson, Mark A.

doi:10.2139/ssrn.982615

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A Brief History of the 1987 Stock Market Crash With a Discussion of the Federal Reserve Response

FEDS Working Paper No. 2007-13

25 Pages Posted: 26 Apr 2007

See all articles by Mark A. Carlson

Mark A. Carlson

Board of Governors of the Federal Reserve System

Date Written: April 2007

Abstract

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

Carlson, Mark A., A Brief History of the 1987 Stock Market Crash With a Discussion of the Federal Reserve Response (April 2007). FEDS Working Paper No. 2007-13, Available at SSRN: https://ssrn.com/abstract=982615 or http://dx.doi.org/10.2139/ssrn.982615