Finanical Crises of September 11th Essay

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On September 11, 2001 (9/11) four planes were hijacked and three out of four crashed into buildings, killing more than 3,000 people. Economically the immediate consequences of 9/11 were a massive drop in the stock market, crippling losses in the airline and other transportation sectors, and widespread uncertainty. The Bush administration and Congress responded with a law that bailed out the airlines, and the economic issues temporarily receded politically. The Federal Reserve had a major challenge on September 11, 2001 as the attacks by terrorist on Washington, Pennsylvania and New York were disruptive on the U.S. financial markets. The Federal Reserve immediately issued a short statement (FRB, 2001) “The Federal Reserve System is open …show more content…
On September 11, 2001 (9/11) four planes were hijacked and three out of four crashed into buildings, killing more than 3,000 people. Economically the immediate consequences of 9/11 were a massive drop in the stock market, crippling losses in the airline and other transportation sectors, and widespread uncertainty. The Bush administration and Congress responded with a law that bailed out the airlines, and the economic issues temporarily receded politically. The Federal Reserve had a major challenge on September 11, 2001 as the attacks by terrorist on Washington, Pennsylvania and New York were disruptive on the U.S. financial markets. The Federal Reserve immediately issued a short statement (FRB, 2001) “The Federal Reserve System is open and operating. The discount window is available to meet liquidity needs.” The results, the Federal Reserve lowered interest rates and loaned more that $45 billion to financial institutions in order to provide stability to the U.S. economy. Within a little over a week, the Federal Reserve lending had returned the financial markets to pre-9/11 levels and a liquidity scare had been averted (History of the Federal Reserve, 2013).
The Effects of September 11th In the weeks following the attacks consumer spending dropped sharply with the exception of items purchased in-relation-to preparation for possible additional attacks. Items with increase in sales were: groceries, security devices, bottled water and purchases of insurance. The weakness in

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