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FED WILL ACT QUICKLY TO PREVENT FURTHER UPHEAVAL

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Federal Reserve officials were monitoring stock and currency markets overseas Monday, poised to take emergency action if necessary to prevent a repeat or worse of the Friday the 13th stock plunge.

A senior Fed official, speaking on condition of anonymity Sunday, said the central bank's counterparts in Japan and Europe had given assurances that they stood ready to supply needed cash to the banking systems in their countries to stem any fallout from the U.S. plunge.The world's central banks also were preparing to intervene if necessary by selling dollars to keep the value of the U.S. currency from falling precipitously, the official said.

Fed Chairman Alan Greenspan planned Monday to make his first public comments since the Dow Jones industrial average plummeted 190 points on Friday, the worst drop since the 1987 crash. He was appearing before the American Bankers Association, holding its annual convention in Washington, D.C.

For the 6,500 bankers gathered for cocktails and conferences, Friday's events are reminiscent of the opening of the group's 1987 convention in Dallas when the market crashed 508 points, causing Greenspan to abruptly cancel his speech and jet back to Washington.

Greenspan was widely credited with decisive action that prevented the 1987 crash from wreaking havoc on the banking system and perhaps toppling the entire country into a recession.

While the injection by the Fed of massive amounts of cash into the system cannot by itself push stocks higher, it does serve to reassure nervous bankers that they need not cut off credit to securities firms suffering heavy losses.

The brokerage houses, assured of a reliable line of credit, then can refrain from selling stock simply to replace their dwindling supplies of cash. Such waves of forced sales can drive prices down even further.

Meanwhile, a senior Bush administration official, who last month sharply criticized the Fed's policy of fighting inflation with high interest rates, expressed confidence in the central bank's ability to contain market turmoil Monday.

"I am sure they will do what is right, what is prudent, what is sensible," budget director Richard Darman said Sunday in an interview on ABC-TV's "This Week with David Brinkley."

Treasury Secretary Nicholas F. Brady, in a statement Friday, said the stock plunge would not affect the continuation of moderate growth for the entire U.S. economy.

The bankers at their convention Sunday for the most part agreed. Some said the market shock may be a blessing in disguise if it encourages a new sense of caution about highly leveraged corporate buyouts.

It was a snag in bank financing for a buyout of United Airlines that sparked Friday's selloff.

"What we were seeing was a house of cards, bound to come tumbling down," said Donald T. Senterfitt, vice chairman of Sun Trust Bank Inc. in Orlando, Fla. "I hope the United Airlines thing marks a more conservative approach by banking throughout."

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Key players in U.S. financial markets

-RICHARD A. GRASSO, president of the New York Stock Exchange. Grasso oversees the nation's largest stock exchange, which lists about 1,700 companies and where at average of more than 160 million shares were traded daily last year. He is in charge of coordinating market actions with government regulators and Wall Street professionals.

-RICHARD C. BREEDEN, chairman of the Securities and Exchange Commission, which regulates the nation's financial markets. Breeden was sworn in Wednesday by President Bush. He most recently drafted the savings and loan bailout legislation.

-ALAN GREENSPAN, chairman of the Federal Reserve Board. The Fed plays a critical role in the stock market by maneuvering the flow of the nation's money supply. In the event of a large selloff, the Fed could be forced to pressure banks to provide more credit to Wall Street professionals who need emergency loans to keep trading.

-NICHOLAS F. BRADY, secretary of the Treasury, can set the tone for a market reaction as the Bush administration's chief spokesman on the economy. Brady, who led a Reagan White House task force investigation of the October 1987 market break, said Friday's decline "doesn't signal any fundamental change in the condition of the economy."

-JOSEPH R. HARDIMAN, president of the National Association of Securities Dealers, the nation's second-largest exchange. The NASD is an over-the-counter market - meaning there is no central exchange floor - in which trading occurs via a computerized system.

-KENNETH R. LEIBLER, president of the American Stock Exchange. The New York-based Amex is the third-largest exchange. In addition to stocks, futures options are traded.

-LEO MELAMED, executive committee chairman of the Chicago Mercantile Exchange. The Merc is important because it trades stock-index futures, which are contracts for future delivery of groups of stocks. Futures traders can use them to hedge against losses on actual stock market investments.