[econ, hist of now, secret histories] Fwd: The Astonishing Story of the Federal Reserve on 9-11
So it turned out all the Y2K preparation wasn't wasted: [Federal Reserve Vice Chairman] Ferguson, considered a deliberative and thoughtful man by his staff, [the morning of Sept 11, 2001] settled into his office and turned on his television to keep track of the markets. When the second plane hit the World Trade Center no one had to tell Ferguson, he knew the country was under attack and he already knew that the attack was aimed at the financial backbone of the world, lower Manhattan. Ferguson declared an emergency and all over the Fed stunned staff found assurance in going through emergency procedures for which they had prepared. The Joint Y2K Committee Ferguson had so recently headed proved to be a windfall of emergency planning and the entire Fed system referred back to those decisions and the associated training throughout the 9-11 crisis. By the time employees could all hear the muffled thump coming from the direction of the Pentagon and smoke could be seen out the windows the staff had secured themselves and the premises and they had started to organize their war room.
[...]
When Seven World Trade Center fell steel I-beams scissored into a major Verizon communications hub. Switching equipment which handled 40% of the land lines in lower Manhattan and 20% of the lines for the New York Stock Exchange (NYSE) were instantly cut. This included all their internet, voice, PBX and data lines. Other providers were also hit though none quite as deeply. That the FedNY was still up and running was a tribute to their (clearly smarter-than-your average-bear) IT staff who had managed to keep the computers and networks functioning, for the most part, with intended emergency systems working as planned. During the Ferguson-led Y2K emergency planning it was determined that key employees should carry two cell phones from two different providers and pre-load them with a master list of phone numbers including their key co-workers, key bank customers, banking regulators, utility service providers and the like. In many cases they had multiple numbers for specific contacts at each organization. It was this kind of planning which proved invaluable at all the Fed Banks across the country. That essential people were able to reach one another was a significant cog in the process.
[...]
Back in Washington Ferguson was only just getting started. Alan Greenspan, finally on the ground and with a phone in his hand, had called Ferguson and told him that he “trusted him” and that he knew Ferguson would make the right decisions. Ferguson immediately got out every tool in the Fed’s great big tool box and brought them all to bear opening up the taps of liquidity.
First up was the discount window. The Federal Reserve Act of 1914 was intended to bring stability and flexibility the financial system through the creation of the Federal Reserve Bank and sets as one of its objectives the necessity to “furnish elastic currency.” Certainly this was well in evidence during the week that followed 9-11. Each Fed Bank was instructed to reach out to all their depository customers to find out if and how much they would need to borrow from the discount window on the night of the 11th. Fed Banks across the country had staff working until midnight to help banks make assessments and close their day. Interestingly, during Y2K planning the Fed had arranged with depository institutions to set aside some pre-pledged collateral and it was against these emergency funds that most banks drew thus saving the time and the regulatory checking usually necessary.
[...]
The staff at Chicago Fed, like all the branches across the country, was working twelve to sixteen hour days and many worked those hours straight through the weekend. Different Fed branches have different areas of expertise. Chicago Fed, due to its proximity to the Chicago Board of Trade and the Chicago Mercantile Exchange, was given the responsibility for collecting data and coordinating with the futures markets. Chicago also has the Customer Relations & Support Office (CRSO) for the entire Fed system. Every Fed depositor has a “personal” Fed CRSO banker and each person in customer support has access to multiple ways to reach their prime designated contact at all of the fifty largest banks in the country. This allowed Fed customers to deal directly with people they already knew and who already knew them. When it came to calming fears and providing liquidity options, this person-to-person approach proved to be invaluable.
[...]
Not to be underplayed was also the value the Fed had come to place on person-to-person relationships. On a day when “trust me” really meant something the Fed was able to draw upon well established positive relationships in order to keep the economy of the United States and of the world moving.
Lots lots lots more; long but fascinating: The Astonishing Story of the Federal Reserve on 9-11 by Arliss Bunny.
(Via Metafilter, at which there are links to lots of the source documents.)
[...]
When Seven World Trade Center fell steel I-beams scissored into a major Verizon communications hub. Switching equipment which handled 40% of the land lines in lower Manhattan and 20% of the lines for the New York Stock Exchange (NYSE) were instantly cut. This included all their internet, voice, PBX and data lines. Other providers were also hit though none quite as deeply. That the FedNY was still up and running was a tribute to their (clearly smarter-than-your average-bear) IT staff who had managed to keep the computers and networks functioning, for the most part, with intended emergency systems working as planned. During the Ferguson-led Y2K emergency planning it was determined that key employees should carry two cell phones from two different providers and pre-load them with a master list of phone numbers including their key co-workers, key bank customers, banking regulators, utility service providers and the like. In many cases they had multiple numbers for specific contacts at each organization. It was this kind of planning which proved invaluable at all the Fed Banks across the country. That essential people were able to reach one another was a significant cog in the process.
[...]
Back in Washington Ferguson was only just getting started. Alan Greenspan, finally on the ground and with a phone in his hand, had called Ferguson and told him that he “trusted him” and that he knew Ferguson would make the right decisions. Ferguson immediately got out every tool in the Fed’s great big tool box and brought them all to bear opening up the taps of liquidity.
First up was the discount window. The Federal Reserve Act of 1914 was intended to bring stability and flexibility the financial system through the creation of the Federal Reserve Bank and sets as one of its objectives the necessity to “furnish elastic currency.” Certainly this was well in evidence during the week that followed 9-11. Each Fed Bank was instructed to reach out to all their depository customers to find out if and how much they would need to borrow from the discount window on the night of the 11th. Fed Banks across the country had staff working until midnight to help banks make assessments and close their day. Interestingly, during Y2K planning the Fed had arranged with depository institutions to set aside some pre-pledged collateral and it was against these emergency funds that most banks drew thus saving the time and the regulatory checking usually necessary.
[...]
The staff at Chicago Fed, like all the branches across the country, was working twelve to sixteen hour days and many worked those hours straight through the weekend. Different Fed branches have different areas of expertise. Chicago Fed, due to its proximity to the Chicago Board of Trade and the Chicago Mercantile Exchange, was given the responsibility for collecting data and coordinating with the futures markets. Chicago also has the Customer Relations & Support Office (CRSO) for the entire Fed system. Every Fed depositor has a “personal” Fed CRSO banker and each person in customer support has access to multiple ways to reach their prime designated contact at all of the fifty largest banks in the country. This allowed Fed customers to deal directly with people they already knew and who already knew them. When it came to calming fears and providing liquidity options, this person-to-person approach proved to be invaluable.
[...]
Not to be underplayed was also the value the Fed had come to place on person-to-person relationships. On a day when “trust me” really meant something the Fed was able to draw upon well established positive relationships in order to keep the economy of the United States and of the world moving.
Lots lots lots more; long but fascinating: The Astonishing Story of the Federal Reserve on 9-11 by Arliss Bunny.
(Via Metafilter, at which there are links to lots of the source documents.)