Ferguson's Leadership Crucial in Stabilizing US Financial System After 9/11

As the Federal Reserve Board of Governors' only member in Washington on September 11, 2001, Roger W. Ferguson Jr., then Vice Chairman, led the central bank's response to the unprecedented crisis.

The attacks on the Twin Towers struck at the heart of the American financial system and put the global economy in jeopardy. The Federal Reserve's initial response was hindered by the absence of Chairman Alan Greenspan, New York Fed President William McDonough, and Treasury Secretary Paul O'Neill, who were all out of the country.

Ferguson recalled that despite the widespread damage to banks' operations in Lower Manhattan, they played a crucial role in preventing a financial meltdown. The Federal Reserve is designed to work through the banking system to maintain financial stability, and Ferguson's team took aggressive action to ensure liquidity.

Within hours of the attacks, the Fed issued statements reassuring markets that Fedwire would remain open and provide liquidity. They then increased lending from the discount window to record levels, with overnight loans totaling $45 billion on September 12, compared to a usual average of $59 million.