Bear Stearns has difficulty raising short-term financing;
customers begin to withdraw their money
Bear is sold to JP Morgan Chase with Federal Reserve
The Fed opens its discount window to the four remaining
- Fed actions provide only temporary relief
Fannie Mae and Freddie Mac, two governmentsponsored enterprises (GSEs) are placed into conservatorship
other money market mutual funds are
commonly referred to as a bailout of the U.S. financial system, is a law enacted in response to the subprime mortgage crisis authorizing the United States Secretary of the Treasury to spend up to $700 billion to purchase distressed assets, especially mortgage-backed securities, and supply cash directly to banks. The funds for purchase of distressed assets were mostly redirected to inject capital into banks and other financial institutions while the Treasury continued to examine the usefulness of targeted asset purchases. Both foreign and domestic banks are included in the program. The Federal Reserve also extended help to American Express, whose bank-holding application it recently approved. The Act was proposed by Treasury Secretary Henry Paulson during the global financial crisis of 2008.