The financial crisis intensified significantly in September and October. In September the Treasury and the Federal Housing Finance Agency placed the government-sponsored enterprises Fannie Mae and Freddie Mac into conservatorship, and Lehman Brothers Holdings filed for bankruptcy. In the following weeks several other large financial institutions failed or came to the brink of failure or were acquired by competitors under distressed circumstances.

Losses at a prominent money market mutual fund promptly investors who had traditionally considered money market mutual funds to be virtually risk-free to withdraw large amounts from such funds. The resulting outflows threatened the stability of short-term funding markets, particularly the commercial paper market upon which corporations rely heavily for their short-term borrowing needs.