bill fancher fancher at
Mon Nov 8 09:42:38 PST 1999

> Enrique Diaz-Alvarez wrote:
>>What I had in mind was Bank One merging with Goldman Sachs, say, then
>>the ball falling on red when GS has bet the house on black, thus
>>activating an FDIC bailout of the whole structure.
> We already effectively have that. The Fed thought it important to
> bail out Long-Term Capital Management, meaning that the safety net
> extends even to hedge funds.
> Doug

I have no problem with the Fed forcing players to keep the financial system stable as long as the public isn't absorbing the losses for failed gambles.

From <>:

But Greenspan, along with New York Fed President William McDonough, stressed that LTCM's rescue was not a government bailout because public funds were not involved in the effort.

"The Federal Reserve Bank of New York's efforts were designed solely to enhance the probability of an orderly private-sector adjustment," Greenspan said. "No Federal Reserve funds were put at risk, no promises were made by the Federal Reserve and no individual firms were pressured to participate."

-- bill

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