http://en.wikipedia.org/wiki/Federal_Reserve_System#cite_note-91
Banks were not lending money to each other because there was a fear that the loans would not be paid back. Banks refused to go to the discount window because it is usually associated with the stigma of bank failure.Under the Term Auction Facility, the identity of the banks in need of funds is protected in order to avoid the stigma of bank failure.Foreign exchange swap lines with the European Central Bank and Swiss National Bank were opened so the banks in Europe could have access to U.S. dollars.
Banks were not lending money to each other because there was a fear that the loans would not be paid back. Banks refused to go to the discount window because it is usually associated with the stigma of bank failure.Under the Term Auction Facility, the identity of the banks in need of funds is protected in order to avoid the stigma of bank failure.Foreign exchange swap lines with the European Central Bank and Swiss National Bank were opened so the banks in Europe could have access to U.S. dollars.
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