In March 2008, the U.S. government and the U.S. Federal Reserve has adopted various policies over the past several months to address the mortgage crisis, which threatened to drag the economy into recession. The Bush administration has approved a package of financial incentives more than $ 150 billion. Repeatedly cut interest rates at the fastest pace in a decade, to 2.25% as of March 2008. Fed, in an unprecedented move, helped JPMorgan Chase take over Bear Stearns, which was on the verge of collapse. However, as the global economy experienced a slowdown stemming from the U.S. mortgage crisis, politicians were caught in the intense debate over what the "right" decision would be, and the effects of these policies on global imbalances. "Hide
by Laura Alfaro, Renee Kim Source: Harvard Business School 20 pages. Publication Date: March 28, 2008. Prod. #: 708036-PDF-ENG