The Fed loaned money to J.P.Morgan and AIG because it was concerned about:
A) moral hazard on the part of these banks.
B) systemic risk,should these banks fail.
C) the liquidity of these banks.
D) the market demands being placed on these banks.

Question

Quizplus · Accepted Answer

The Fed loaned money to J.P. Morgan and AIG because it was concerned about systemic risk, should these banks fail. The failure of large financial institutions could have a ripple effect on the entire financial system, causing widespread panic and economic damage. The Fed's loans were intended to stabilize these institutions and prevent a systemic crisis.

The Fed Loaned Money to J