Losses on Lehman’s commercial paper at a prominent money market mutual fund led to a run on that fund and many others; over the subsequent weeks, fearful money-fund investors withdrew more than $ billion. Equity prices fell precipitously, large firms and banks hoarded cash, and short-term credit became available, if at all, only at very high interest rates and for very short terms.
The Reserve Bank’s 75 year journey has been marked by a host of historic developments both at home and abroad.