Wall Street Journal
December 1, 2011
Wall Street executives, in a private meeting with a top Federal Reserve official in late September, recommended a coordinated effort by central banks to remedy the European financial crisis, according to Fed documents received in an open-records request.
The meeting, led by Louis Bacon, founder of hedge fund Moore Capital Management, preceded a joint action Wednesday by the world's major central banks, which banded together to provide liquidity to the markets through cheap U.S. dollar loans.
Wednesday's moves involved central-bank coordination to lend to European banks, and it couldn't be determined what precisely prompted the Fed and the other central bankers to act. In the September meeting, the Wall Street executives suggested a different kind of coordination by central banks—boosting the global economy by buying securities or through other methods of injecting liquidity. Coordinated lending to European banks wasn't among their suggestions.
But analysts say Wednesday's broad stock-market rally was partly fueled by investors' expectations that central banks will do more to ease the crisis, such as the kind of central-bank coordination recommended by the members at the September meeting.
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