Case | HBS Case Collection | January 2009 (Revised February 2010)

Necessity and Invention: Monetary Policy Innovation and the Subprime Crisis

by Aldo Musacchio and Dante Roscini

Abstract

This case describes the efforts of Ben Bernanke, Chairman of the Federal Reserve, to improve liquidity in money markets during the subprime crisis. The case explains the four main new tools for monetary policy (or quantitative easing) the Federal Reserve has used between 2007 and 2009: the Term Auction Facility (TAF), the Primary Dealer Credit Facility (PDCF), the Term Securities Lending Facility (TSLF), and the Asset Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF).

Keywords: Financial Crisis; Money; Financial Liquidity; Central Banking; Policy; Business and Government Relations;

Citation:

Musacchio, Aldo, and Dante Roscini. "Necessity and Invention: Monetary Policy Innovation and the Subprime Crisis." Harvard Business School Case 709-041, January 2009. (Revised February 2010.)