Subprime â€˜crisisâ€™: FAQs (revised & updated) | vox – Research-based policy analysis and commentary from Europe’s leading economists
Letâ€™s start with the facts: On Thursday 9 August 2007 the Federal Reserveâ€™s Open Market Trading Desk (the â€œDeskâ€) injected $24 billion into the U.S. banking system. This was done in two equal size operations, one at 8:25am and a second 70 minutes later at 9:35am.1 On Friday 10 August 2007, the Desk was in the market three times (8:25am, 10:55am, and 1:50pm) putting in a total of $38 billion dollars. By early this week, things seemed to have returned to normal with injections of $2 billion on Monday and no action at all on Tuesday.
The Fedâ€™s operations came on the heels of two even larger injections by the European Central Bank (ECB) in Frankfurt. On Thursday morning the ECB in Frankfurt Germany had put nearly â‚¬95 billion ($130 billion) into European financial institutions, followed by a somewhat smaller operation of â‚¬61 billion ($83.6 billion) on Friday. Things continued to seem unsettled in Europe after the weekend, as the ECB added â‚¬47.7 billion ($65.3 billion) on Monday (13 August), and then in two separate operations put â‚¬25 billion ($34.2 billion) into the European banking system on Tuesday.