The Board of Goverernors of the Federal Reserve System's "News and Events" page features "Speeches and Testimony" from the Chairman and Governors of the Federal Reserve System. Fed Chairman Ben Bernanke said at the Federal Deposit Insurance Corporation's Forum on Mortgage Lending for Low and Moderate Income Households in Arlington, Virginia, "This run was surprising, however, in that Bear Stearns's borrowings were largely secured -- that is, its lenders held collateral to ensure repayment even if the company itself failed. However, the illiquidity of markets in mid-March was so severe that creditors lost confidence that they could recoup their loans by selling the collateral. Hence, they refused to renew their loans and demanded repayment." As is being reported, the Fed also said, "We are currently monitoring developments in financial markets closely and considering several options, including extending the duration of our facilities for primary dealers beyond year-end, should the current unusual and exigent circumstances continue to prevail in dealer funding markets."
