Fed releases 'secret' information Marketplace From American Public Media
Wall Street
Big U.S. banks such as Wachovia and Morgan Stanley relied on the Fed for short-term loans of $6 billion and $1.25 billion, respectively, in the fall of 2008, the documents showed. So did some of the largest foreign banks — Barclay's borrowed $1 billion.
Most of the Fed's crisis-era lending — more than $3 trillion worth — came through those other programs. Fed documents showed that it had given trillions in emergency aid to U.S. and foreign banks as well as companies. The disclosures were required under the financial overhaul law enacted last year.
Arthur Wilmarth, a professor at George Washington University Law School, said the two-year gap foreseen in the law is "eminently reasonable," adding the disclosures are important to give the public a better idea of what happened during the crisis.
It is hard to draw conclusions about the impact that disclosure could have on banks' use of the Fed's traditional lending tool from data that's already available. But it looks as though when chances rise that disclosure could increase, the use of the discount window decreases.
After the Manhattan federal appeals court on March 19, 2010 upheld a lower court's decision granting the request by Bloomberg News and Fox News, discount-window borrowing accelerated its decline. Banks borrowed less than $10 billion in the week ending March 24, compared to $15 billion in the week ending March 10.
