Summary: The increasing interconnectedness of financial institutions and markets has underscored the need for diverse federal, state, international, and private organizations to work together to contain and resolve financial disruptions. The federal government's ability to manage financial crises effectively is important to the stability of the U.S. financial system and economy as well as the worldwide financial system. This report examines federal actions that successfully contained four major financial crises during the 1980s--the Mexican debt crisis of 1982; the near failure of the Continental Illinois National Bank in 1984; the run on state-chartered, privately insured savings and loans in Ohio in 1985; and the stock market crash of 1987. The report focuses on the following three phases of financial crisis management: (1) preparedness, which includes activities undertaken before a crisis takes place; (2) containment, which involves measures undertaken immediately following a crisis to mitigate financial disruption and lessen any ill effects on the financial system; and (3) resolution, which includes steps taken to reduce the likelihood of a crisis reoccurring.
