Fed Slow To React To 2008 Financial Crisis, Transcripts Say

Law360, Los Angeles (February 21, 2014, 6:31 PM EST) -- Federal Reserve officials grappling with the bankruptcy filing of Lehman Brothers Holdings Inc. in September 2008 failed to comprehend the size, scope and swiftness of the emerging financial crisis, according to transcripts of emergency meetings the central bank released Friday.

The transcripts, which present the most complete account yet of the Fed's decision-making during the height of the crisis, show that central bank officials believed previous interest rate cuts and a theoretical rebound in the declining housing market would strengthen the U.S. economy and deter a potential recession....
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