holdings expanded appreciably over time, the speed of expansion was not excessive. Moreover, the Fed later disposed of these holdings so that its long-term policy goals would not be adversely affected. The Fed successfully met the unprecedented demands for credit by pairing a strategy of moral suasion that motivated nervous banks to lend to securities firms alongside its moves to reassure those banks by actively supplying them with liquidity. As economist Ben Bernanke (who was later to become Chairman of the Federal Reserve) wrote: The Fed's two-part strategy was thoroughly successful, since lending to securities firms by large banks in Chicago and especially in New York increased substantially, often nearly doubling. United Kingdom On Friday, October 16, all the markets in London were unexpectedly closed due to the Great Storm of 1987. After they re-opened, the speed of the crash accelerated, partially attributed by some to the storm closure. By 9:30AM, the FTSE 100 Index had fallen over 136 points. It was down 23% in two days, roughly the same percentage that the NYSE dropped on the day of the crash. Stocks then continued to fall, albeit at a less precipitous rate, until reaching a trough in mid-November at 36% below its pre-crash peak. Stocks did not begin to recover until 1989. Japan In Japan, the October 1987 crash is sometimes referred to as "Blue Tuesday", in part because of the time zone difference, and in part because its effects after the initial crash were relatively mild. In both places, according to economist Ulrike Schaede, the initial market break was severe: the Tokyo market declined 14.9% in one day, and Japan's losses of US$421 billion ranked next to New York's $500 billion, out of a worldwide total loss of $1.7 trillion. However, systemic differences between the US and Japanese financial systems led to significantly different outcomes during and after the crash on Tuesday, October 20. In Japan the ensuing panic was no more than mild at worst. The Nikkei 225 Index returned to its pre-crash levels after only five months. Other global markets performed less well in the aftermath of the crash, with New York, London and Frankfurt all needing more than a year to achieve the same level of recovery. Several of Japan's distinctive institutional characteristics already in place at the time, according to economist David D. Hale, helped it dampen volatility. These included trading curbs such as a