In the preceding sections, I presented circumstantial and statistical evidence to support my assertion that the Fed was motivated to act as an ILLR in order to ensure the stability of the US financial system and to bring down interest rates, which, indirectly, would stabilize the housing market. Here, I draw on a new resource—transcripts from FOMC meetings during the crisis—to further assess the veracity of my argument. This allows us to see what policymakers actually said during the critical moments in which the decisions to act as the ILLR were made. Not only does this provide another way to test my argument, it also allows us to uncover alternative motivations not yet considered. There is another reason why transcript analysis is important for this study: The Fed’s actions were composed of multiple decisions that took place within a dynamic of changing conditions over a period of many months. None of the analysis presented here has accounted for this effectively. By comparison, the transcript analysis is presented chronologically. The final composition of the swap program and other liquidity facilities was not the result of a single decision by the Fed. Rather, it was the outcome of multiple, successive decisions by the monetary authority. First, there were the initial decisions by the Fed to open the swap lines with the ECB and SNB as well as allowing foreign banks operating in the United States to have access to the TAF. Next, the Fed made the decision to incrementally increase the size of the initial two swap lines and the TAF. Third, after the Lehman bankruptcy filing, the Fed ramped up its ILLR actions by rapidly expanding the swap program—increasing the size of credit lines and the number of participating central banks through new agreements with eight additional advanced economies. Finally, in late October 2008, the FOMC made the unprecedented decision to extend $30 billion swap lines to four select emerging market economies (EMEs). This section reviews how events that unfolded over time led the Fed to initiate and expand its ILLR actions.

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