Question

What is the plunge protection team? Why was it originally formed? What do they do?

Answer 1

Answer )

The "Plunge Protection Team" (PPT) is a informal Group working for Financial Markets. The group was formed to give economic and financial suggestion in case of unstable situation in market. Chairman of the Securities and Exchange Commission,Secretary of the Treasury, Chairman of the Commodity Futures Trading Commission and Chairman of the Board of Governors of the Federal Reserve are members of the committee.

In 1989, Ronald Reagan suggested to form the Working committee of president on Financial Markets situation after two stress situations, 1987 market crash and 1989 near market crash to perform as advisory board.

In 5 Feb 2018 , arbitrary and aggressive buying by Fed cut the decline in Dow Jones in one day. Such suggestion by committee always stops a market collapse. Many such activities were reported during the crisis period of 2007 and 2008.