Subprime mortgages and derivatives, bailout of FNMA, Freddie Mac, and AIG,

 

Analysis the following corrective action taken by the Federal Reserve as a result of the crisis:

• Quantitative easing
• Purchase of toxic assets from financial institutions
• Paying interest on reserve balances

Addressthe following in your analysis:

• Actions taken by the Federal Reserve to mitigate the crisis?
• How the corrective action helped to restore stability to the financial system?
• How the corrective action should prevent recurrence of a similar crisis?