Federal Reserve Orchestrates $3.6 Billion Bailout of Long-Term Capital Management to Prevent Systemic Collapse

On September 23, 1998, Federal Reserve Bank of New York President William McDonough orchestrated a $3.6 billion bailout of hedge fund Long-Term Capital Management (LTCM) by convincing 14 major banks and brokerage firms to inject capital in exchange for 90% ownership of the failing fund. Founded by …