What did the New York Fed do?
Because events were moving swiftly, and with my approval and support, my colleague Mr. Fisher invited representatives of the three firms, which we felt had the greatest knowledge of the situation at Long-Term Capital and a strong interest in seeking a solution, to an early morning meeting on September 22nd. The three firms were Goldman Sachs, Merrill Lynch, and J.P. Morgan. Continuing discussions which commenced the day before, Mr. Fisher explained our interest in being aware of developments and in reducing the risk of an abrupt and chaotic close-out of Long-Term Capital. The firms present stated that they were not aware of any other initiatives then being actively pursued, to resolve Long-Term Capital’s problems. They voiced their own concerns about the risks to the markets of a close-out scenario. They discussed various approaches to stabilizing Long-Term Capital including the concept of a “collective industry” or consortium approach. However, they all agreed that work on a collectiv
