The Policy Reaction
After the largest one day drop in the market in history, the Federal Reserve took immediate steps to increase the supply of liquidity in the market. The goal was to prevent bankruptcies, which would eventually hurt the real economy, by making loans to the investors than were in danger of running out of money. The strategy appeared to have worked, and the Fed certainly earned it's title of "lender of last resort".
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showed last 75 words of 696 total
the crash, a number of regulatory changes have been made to try to prevent another severe "panic" drop in the market. Trading curbs and "circuit breakers" to prevent mass sell-offs by computer traders have been instituted with this goal in mind. So far, there has not been a crash of close to the same magnitude as the 1987 or 1929 crashes - but only time will tell if they will continue to prevent panics in the market.