Liquidity-strained institutions found themselves forced to sell positions, which placed additional downward pressure on asset prices, thereby accelerating margin calls on leveraged actors and amplifying mark-to-market losses for all holders of the assets. The margin calls and booked losses would start another round in the adverse feedback loop.
In short, on the morning of September 11, the Fed, as monetary authority, as payment system operator, as banking supervisor, and as employer, faced an unfolding crisis, and the risks were all to the downside. The outlook was at best uncertain, and potentially quite bleak. Against this background, the Federal Reserve System organized a response that emphasized three objectives.