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Fed Comes To Rescue As Wall St. Giant Slips Bear Stearns Gets Emergency Funds Via J.P. Morgan
By Neil Irwin and Tomoeh Murakami Tse Washington Post Staff Writers Saturday, March 15, 2008; A01
The Fed used a little-known power it last exercised in the 1960s to stem a run on Bear Stearns that could have sent multibillion-dollar losses cascading across the world financial system, causing more failures on Wall Street and threatening to choke off global economic growth.
The Fed's action, arranged in a series of pre-dawn deliberations yesterday, is one of the most significant government efforts to save a private firm in modern times. The nearest parallels are the New York Fed-engineered buyout of the hedge fund Long-Term Capital Management in 1998 and the bailout of Continental Illinois Bank in 1984.
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