Brattle principals George Oldfield and Michael Cragg and research analyst Jehan deFonseka have authored the second in a two-part newsletter series on the credit crisis. The first newsletter, published in 2008, discussed how the credit problems that began in the real estate market were affecting the liquidity and solvency of the commercial banking system as a whole. This follow-up issue, “Understanding the Credit Crisis Part 2: Getting Down the Mountain,” discusses the specific actions being taken by the U.S. Treasury and Federal Reserve in order to overcome the credit crisis. The authors review programs such as the Troubled Asset Relief Program (TARP), which resulted in Treasury investments in weakening financial institutions, and the Fed’s increased investments in mortgage-backed securities. According to the authors, ongoing securities litigation, the need for more consistent financial performance standards, and the extensive investments made by the Treasury and Fed have created a complex and potentially perilous path to financial recovery.