Question

5. government intervention during banking failures which of the following occurred during the credit crisis? check all that apply. the federal reserve tried but failed to bail out american international group. the federal reserve rescued bear stearns by coordinating their acquisition by jpmorgan chase. the federal reserve and treasury had a laissez faire approach to the credit crisis. the supreme court ruled that the federal reserve had exceeded its authority by assisting bear stearns because the financial institution was a securities firm and not a commercial bank.

Answer 1

During the credit crisis, the Federal Reserve succeeded in bailing out AIG and facilitated the rescue of Bear Stearns by JPMorgan Chase. The Federal Reserve and Treasury actively managed the crisis, and there was no Supreme Court ruling against the Federal Reserve's actions with Bear Stearns.

Step-by-step explanation:

During the credit crisis, several actions were taken by the federal government, particularly concerning banking failures. The Federal Reserve did not fail to bail out American International Group (AIG); in fact, facing the prospect that AIG would not be able to pay insurance claims, the Federal Reserve took over AIG's financial obligations by essentially purchasing the company. Furthermore, the Federal Reserve rescued Bear Stearns by facilitating their acquisition by JPMorgan Chase. Contrary to taking a laissez-faire approach, the Federal Reserve and Treasury were heavily involved in the credit crisis, with decisions like the creation of the Troubled Asset Relief Program (TARP) and assistance to the auto industry. The statement regarding the Supreme Court ruling that the Federal Reserve had exceeded its authority by assisting Bear Stearns because it was a securities firm, not a commercial bank, is inaccurate and did not occur.