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By Robin Harding and Tom Braithwaite in Washington and Francesco Guerrera in New York

Published: December 1 2010 17:30 | Last updated: December 1 2010 23:02

Foreign banks were among the biggest beneficiaries of the $3,300bn in emergency credit provided by the Federal Reserve during the crisis, according to new data on the extraordinary efforts of the US authorities to save the global financial system.

The revelation of the scale of overseas lenders’ borrowing underlines the global nature of the turmoil and the crucial role of the Fed as the lender of last resort for the world’s banking sector.

However, news that banks such as Barclays of the UK, Switzerland’s UBS and Dexia of Belgium borrowed billions of dollars at favourable terms from the US government may further anger critics already enraged about the Fed’s bail-out of Wall Street.

After being ordered by Congress to lift the secrecy on the crisis-time aid, the Fed published the details on Wednesday of more than 21,000 transactions with banks from 2007 to 2010.

The biggest cumulative borrower from the Term Auction Facility was Barclays, which bought the US operations of Lehman Brothers out of bankruptcy in September 2008.

Barclays borrowed a cumulative $232bn from the TAF through various subsidiaries. The TAF provided one- or three-month loans from December 2007 until it closed this year.

The amount outstanding at any one time would have been lower as the loans were often rolled over on expiry.

Bank of Scotland and RBS of the UK, Société Générale of France, Dresdner Bank and Bayerische Landesbank of Germany, and Dexia of Belgium were all among the top 10 users of TAF. The second-largest user was Bank of America, which bought Merrill Lynch during the crisis, and borrowed a cumulative $212bn. The biggest seller of commercial paper to the Fed’s Commercial Paper Funding Facility, which bought illiquid short-term loans, was UBS of Switzerland, then insurer AIG. Five of the top 10 CPFF users were European banks.

The biggest users of Fed facilities aimed at struggling Wall Street banks were those that eventually had to be bailed out.

Citigroup was the biggest user of the Primary Dealer Credit Facility, set up in March 2008 to provide overnight funding to bond dealers, and the Term Securities Lending Facility.

Bernie Sanders, the independent senator from Vermont, said: “As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”

Barclays said it had “repaid all the relevant facilities that it accessed in the USA by end December 2009”. RBS said it “no longer makes use of any Federal Reserve schemes   ... and all money borrowed  ... has now been repaid in full with interest”. UBS said its use of the Fed’s facilities was “relatively modest” given its presence in the US.

http://www.ft.com/cms/s/0/4dd95e42-fd6d-11df-a049-00144feab49a.html#axzz16uHciSdp
 

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By Robin Harding and Tom Braithwaite in Washington and Francesco Guerrera in New York

Published: December 1 2010 17:30 | Last updated: December 1 2010 23:02

Foreign banks were among the biggest beneficiaries of the $3,300bn in emergency credit provided by the Federal Reserve during the crisis, according to new data on the extraordinary efforts of the US authorities to save the global financial system.

The revelation of the scale of overseas lenders’ borrowing underlines the global nature of the turmoil and the crucial role of the Fed as the lender of last resort for the world’s banking sector.

However, news that banks such as Barclays of the UK, Switzerland’s UBS and Dexia of Belgium borrowed billions of dollars at favourable terms from the US government may further anger critics already enraged about the Fed’s bail-out of Wall Street.

After being ordered by Congress to lift the secrecy on the crisis-time aid, the Fed published the details on Wednesday of more than 21,000 transactions with banks from 2007 to 2010.

The biggest cumulative borrower from the Term Auction Facility was Barclays, which bought the US operations of Lehman Brothers out of bankruptcy in September 2008.

Barclays borrowed a cumulative $232bn from the TAF through various subsidiaries. The TAF provided one- or three-month loans from December 2007 until it closed this year.

The amount outstanding at any one time would have been lower as the loans were often rolled over on expiry.

Bank of Scotland and RBS of the UK, Société Générale of France, Dresdner Bank and Bayerische Landesbank of Germany, and Dexia of Belgium were all among the top 10 users of TAF. The second-largest user was Bank of America, which bought Merrill Lynch during the crisis, and borrowed a cumulative $212bn. The biggest seller of commercial paper to the Fed’s Commercial Paper Funding Facility, which bought illiquid short-term loans, was UBS of Switzerland, then insurer AIG. Five of the top 10 CPFF users were European banks.

The biggest users of Fed facilities aimed at struggling Wall Street banks were those that eventually had to be bailed out.

Citigroup was the biggest user of the Primary Dealer Credit Facility, set up in March 2008 to provide overnight funding to bond dealers, and the Term Securities Lending Facility.

Bernie Sanders, the independent senator from Vermont, said: “As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”

Barclays said it had “repaid all the relevant facilities that it accessed in the USA by end December 2009”. RBS said it “no longer makes use of any Federal Reserve schemes   ... and all money borrowed  ... has now been repaid in full with interest”. UBS said its use of the Fed’s facilities was “relatively modest” given its presence in the US.

http://www.ft.com/cms/s/0/4dd95e42-fd6d-11df-a049-00144feab49a.html#axzz16uHciSdp


They and others probably nailed the FDIC pretty hard too....:down:
 
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