The reason for Alan Greenspan’s high influence is because The Federal Reserve Board’s crucial powers are concentrated in the Board of Governors, which is vital in all policy issues regarding bank regulation and supervision and in most aspects monetary control. Since he is the head of the Board of Governors, Dr. Greenspan has America’s economy in his hands with his forecast, fluctuations in interest rates and in controlling inflation. In addition, He has done numerous actions to save America’s economy from inflation and/or recession. An example of this would be the Black Monday Stock Market Crash of 1987, the largest one-day decline in stock prices to date (the Dow Jones Industrial Average declined by more than 500 points). The crash nearly crippled the financial markets, and most of the credit for the prevention of a market melt-down after the Black Monday must be given to the Federal Reserve Board and Alan Greenspan. The pressure of keeping markets functioning during the sharp decline in stock prices, on that Monday, meant that many brokerage houses and dealer-brokers (specialists who maintain orderly trading on the stock exchanges) were strictly in need of additional funds to finance their activities. However, many New York banks, as well as foreign and regional U.S. banks were very nervous about the financial health of securities, and they were cutting back credit to the securities industry at the crucial time when it was most needed. Upon learning the plight of the securities industry, Dr. Greenspan and E. Gerald Corrigan (the president of the Federal Reserve Bank of New York and the Fed official most closely in touch with the Wall Street at that time) became fearful of a spreading collapse of securities firms. To prevent this from happening, Greenspan announced before the market open the next day, on Tuesday, the Federal Reserve System’s “readiness to serve as a source of liquidity to support the economic and financial system.” In addition to this announcement, the Fed made it clear that it would provide discount loans to any bank that would make loans to the security. The outcome of the Fed’s well-timed action was that a financial panic was averted. The markets kept functioning on Tuesday, and a market rally took place that day, with the Dow Jones Industrial Average climbing over 100 points.

o directing the U.S. economy. Presently, Chairman Greenspan is in charge of two committees in the Federal Reserve Board: the Board of governors, which manages regulation and administrative issues, and the

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