Introduction
Tuesday, September 22, 8:30pm, the Federal Reserve Bank of New York (Fed). It was a meeting at which
all of Wall Street’s biggest power players were present. In attendance were Sandy Warner, chairman of JP
Morgan; David Komansky, chairman, and Herb Allison, president of Merrill Lynch; Frank Newman,
chairman of Bankers Trust; Jon Corzine, co-chairman of Goldman Sachs, and Robert Katz, the managing
director; Deryck Maughan, co-CEO of Salomon Smith Barney; Allen Wheat, chairman of Credit
Suisse First Boston; Philip Purcell, chairman of Morgan Stanley; Jimmy Cayne, president of Bear Stearns
& Co, and Warren Spector, deputy president. Unlike previous gatherings at the Fed for which festive
occasions were celebrated, this meeting was a grim one. They were there to help rescue Long-Term
Capital Management, an unregulated hedge fund which was threatening to spin out of control, taking
the global capital markets with it.1