Financial meltdown

What caused the financial meltdown? What was the role of the Federal Reserve in this event? What was the Federal Reserve trying to accomplish?

You may conduct further research to determine whether the Federal Reserve was successful.

Other more specific questions to consider and discuss:

Secretary Paulson decided not to guarantee a government loan for Lehman Brothers as he had for Bear Stearns with the JPMorgan takeover. What happened as a result of that decision?
Why did the government give AIG a loan of $85 billion after refusing to loan money for the Lehman Brothers acquisition?
What is capital injection?
The last scene in the film shows the leaders of the largest banks being told by Henry Paulson that they would have to accept government capital injections. What was the rationale for that decision?



Sample Solution