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...result was a parallel system almost as big as the banking system that had none of its post-Depression stabilizing pillars: no deposit insurance, no access to the lender of last resort, no resolution regime and only a patchworky, inadequate framework of restraints for risk-taking. In the old system, Americans' deposits in regular banks financed the system. In the shadow banking system, Americans' deposits in money market funds provided the asset anchor. As AIG teetered on the brink in mid-September, a run began by institutional investors on the money market funds...

Author: /time Magazine | Title: Are Paulson and Bernanke Running Out of Options? | 10/8/2008 | See Source »

...usually reserved for currency stabilization. The AIG and Merrill Lynch interventions were attempts to dissolve failing companies in an orderly fashion without panic, as was the Wachovia bailout. The opening of the discount window to investment banks was the first effort to provide access to a lender of last resort. As for regulation, that will have to be something the Fed, Treasury, SEC and Congress tackle after the crisis crests...

Author: /time Magazine | Title: Are Paulson and Bernanke Running Out of Options? | 10/8/2008 | See Source »

...moves fit the pattern. But they also show just how far the crisis has spread. The decision to shore up commercial paper will allow companies that are unable to borrow money from either the shadow or the real banking system to have access to the lender of last resort (the government), ensuring that credit still moves in the system - hopefully. And the $700 million program Paulson is steaming ahead with will allow for the clearing of bad loans, and inevitably the orderly failure of companies that invested too heavily in them...

Author: /time Magazine | Title: Are Paulson and Bernanke Running Out of Options? | 10/8/2008 | See Source »

PHUKET Hotel Unwind along a secluded stretch of Thailand's Mai Khao Beach at the new Anantara Resort & Spa, designed by famed architect and landscape artist Bill Bensley...

Author: /time Magazine | Title: Calendar | 10/6/2008 | See Source »

Didn't always directly answer the questions but deflected and hedged with offhand subtlety. Rarely took the bait when Biden faulted John McCain. Was happy to resort to the safety of "maverick" imagery in a pinch...

Author: /time Magazine | Title: The Vice-Presidential-Debate Report Cards | 10/2/2008 | See Source »

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