It should similarly be viewed as a rare occasion, warranted because of the potential for serious disruptions to markets. We must also remain mindful where to draw the line at which public-sector involvement ends. The efforts last week were limited to facilitating a private-sector agreement and had no implications for Federal Reserve resources or policies.
Footnotes 1 At the same time, not all fire sales are without merit. The Resolution Trust Corporation earlier this decade chose to offer commercial real estate in what might be termed a fire sale because it was the only way an otherwise seized-up market could be galvanized.