Updated from 10:41 a.m. EST with descriptions of meetings held Jan. 21, March 10, and Sept. 29, 2008.
NEW YORK (TheStreet) -- The Federal Reserve released on Friday transcripts of its 2008 policy-making meetings, which included the six emergency meetings the central bank convened as the global financial crisis crushed the economy.
TheStreet is detailing what then-Fed Chairman Ben Bernanke, then Vice-Chairman Timothy Geithner and other Fed bankers were saying as the worst financial crisis since the Great Depression unfolded.
Jan. 21, 2008 at 6 p.m.
The Federal Open Market Committee convened its first 2008 emergency meeting as a conference call to discuss how quickly the housing and financial crises worsened since December 2007.
The Fed's noteworthy action was to cut the benchmark interest rate by 75 basis points to 3.5% in an effort to offset the damaging effects entering the economy.
The DAX in Germany dropped some 8% that day and oil dropped substantially, "reflecting exceptions of slowing global demand. So it is not necessarily a U.S.-only story." More than five years after the crisis, the world witnessed the worst recession in the United States since the Great Recession and the European sovereign debt crisis that threatened the dissolution of the eurozone economy.
Fed members at this meeting introduced its swap lines with central banks around the world. The decision was for an open-ended program to provide a backstop for the entire market.
Hawkish members of the committee remained unconvinced of the magnanimity of the situation. Richmond Fed Pres. Jeffrey Lacker, St. Louis Fed Pres. Bill Poole and Dallas Fed Pres. Richard Fisher worried that emergency action a week before the regularly scheduled meeting would appear reactionary to falloff in stocks.
Poole, who TheStreet's Jim Cramer famously criticized, went as far as to predict that investors would view a rate cut as a response to foreign markets.
"I still come back to the point that I do not see a convincing argument for acting today rather than nine days from now, and I see lots of downside acting today because of the problems that it is going to create for us in the future," Poole said.
The committee chose to lower the rate, which today still remains at a range of 0% to 0.25% with few Fed worries of inflation.
March 10, 2008 at 7:15 p.m.
FOMC members convened on an emergency phone call just days before former investment bank Bear Stearns' fire sale, but central bankers didn't even consider a bailout days before its bailout.
The Fed's announcement that day expanded its securities lending program, which allowed the central bank to lend up to $200 billion in Treasury securities to primary dealers for 28 days (as opposed to the typical overnight lending agreement) in exchange for agency residential mortgage-backed securities and non-agency mortgage-backed securities.
At center of the discussion was the market effect if the Fed prohibited certain firms, like Bear Stearns, from participating in its lending programs.
"[You] are right; it would be a consequential act for us to say to a primary dealer, 'We are going to restrict you to X' or 'we are not going to consider you eligible any more to bid.' It would not be, we would hope, a visible act. But, of course, in taking the action we would be responsible, in some sense, for contributing to the failure of that institution," Geithner said.
While the Fed decided to provide Bear Stearns with a $12.9 billion loan to forestall its bankruptcy and allow JPMorgan to acquire the bank, it six months later allowed for the infamous Lehman Brothers failure that would panic the world financial system.
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Sept. 16, 2008 at 8:30 a.m.
Bernanke opened the meeting, just a day after Lehman Brothers filed for bankruptcy and Bank of America (BAC - Get Report) announced its intention to buy Merrill Lynch, to note that there were increasing concerns about insurance giant AIG (AIG - Get Report).
AIG, of course, played a central role in the crisis as the company had sold insurance on credit default swaps and collateralized debt obligations.
Sept. 29, 2008 at 9 a.m.
Congress struck down the bill introduced by the Treasury Department that eventually led to the $700 billion Troubled Assets Relief Program (TARP), which triggered the S&P 500 that day to tumble 8.8%. The Fed met that day to discuss the state of financial institutions, especially American International Group and Washington Mutual Bank.
Bernanke didn't know at the early-morning meeting that Congress would fail to pass the "[Treasury Secretary Hank] Paulson financial rescue bill."
Interestingly, William Dudley -- the former senior vice president of the Markets Group at the New York Fed -- noted that the London Interbank Overnight Rate by global banks "actually may be understated." The now-revealed comment comes amid ongoing investigations of manipulations of the LIBOR rate.
All voting members agreed to expand the Fed's swap lines offered to foreign central banks.
Discussion of Wachovia -- the failing bank that Wells Fargo eventually acquired -- focused on capital requirements being made for then-suitor Citigroup. The U.S. Treasury and President George W. Bush would have to agree upon the deal.
Fed President Fisher -- a hawk -- expressed concern that the Washington Mutual and Wachovia deals would increase systemic risk by heightening the concentration of banking assets and deposits to the largest banks. Fisher then said at some point he wanted to have a conversation on the matter of limiting "too-big-to-fail" banks, adding that he understood there wasn't time in an emergency meeting committed to preventing more financial fallout.
Bernanke responded in agreement: "It's very important, as we look toward restructuring our financial regulatory system, to develop good resolution mechanisms and to think about the issues of concentration and too big to fail."
More than five years after the meeting, the Senate Banking Committee is still finalizing details of the Dodd-Frank law to limit system-wide economic exposure to failures of financial institutions. Fed Chairwoman Janet Yellen in recent testimony to the House Financial Services Committee said there is still more that could be done to prevent such scenarios in the future.
Stay tuned for more updates.
-- Written by Joe Deaux in New York.
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