ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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led to dumping of the securities by the creditors and consequential deflation of asset values. So the Federal Reserve lost no time in crafting a strategy and got the creditors to come to the rescue of LTCM. Merril Lynch, Goldman Sachs, Morgan Stanley, Dean Witter, Travelers Group, UBS Securities and several big European banks have taken out a $3.6 billion bailout, buying 90 per cent of the fund. This provides breathing time; the concerned parties can now unwind their positions in an orderly manner. The crisis has been averted.

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