Overheard
Corrections & Amplifications</br></br>The Federal Reserve Act was amended after Sept. 11, 2001, to allow the Board of Governors to act in "unusual and exigent circumstances" even if fewer than five of its members seats are filled, so long as it has a unanimous vote. The Overheard column in Monday's Heard on the Street incorrectly said that five assertive votes were still needed for any such action.</br></br>(WSJ Sept. 28, 2010)</br></br>[Financial Analysis and Commentary]</br></br>Ben Bernanke is preparing his arsenal to keep the economy from slumping anew. But were another financial crisis to hit, the Fed may find one of its guns out of action -- at least in theory. Section 13(3) of the Federal Reserve Act authorizes the board of governors to intervene in markets during "unusual and exigent circumstances" -- invoked in 2008 to make emergency loans to Bear Stearns and American International Group. But it also requires an affirmative vote "of not less than five members" of the Fed board.