Black Monday prompted the United States to create the President’s Working Group on Financial Markets after the 1987 crash. President Ronald Reagan established the group by executive order in March 1988 to improve coordination among federal financial regulators and strengthen the government’s understanding of market disruptions.
Black Monday refers specifically to October 19, 1987, when the Dow Jones Industrial Average fell 22.6% in one session. The collapse was international, affecting markets in Asia, Europe and North America. Investigations examined portfolio insurance, computerized trading, market structure and interactions among futures and cash markets.
The group is commonly called the “Plunge Protection Team,” although that informal label is not its official name. Its formal members include the Treasury secretary, the Federal Reserve chair, the SEC chair and the CFTC chair. It does not mean the government automatically guarantees stock prices or prevents every crash.