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23rd August 2011

Banks borrowed $1.2tr of secret US federal funds

At the height of the banking crisis banks were borrowing $1.2tr from the Federal Reserve under the Emergency Lending program. This is many times the $160bn in official aid granted. The top US banks were the largest borrowers however Royal Bank of Scotland, UBS, Hypo Real Estate and Société Générale also borrowed substantial sums. Reference has been made to the programme by various Washington committees however the total size of the lending has only just been released. The information was obtained by Bloomberg following Freedom of Information requests.


Overall, the peak lending occurred on December 5th 2008. Peak lending to banks under the program included:
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$m
- Morgan Stanley 107.3
- Citigroup 99.5
- Bank of America 91.4
- Royal Bank of Scotland 84.5
- UBS 77.2
- Hypo Real Estate 28.7
- Société Générale 17.4

The Federal Reserve said they gained $13bn in profit and suffered no losses during the programme to date. Bloomberg make the point that the peaks sum of $1,2tr is close to total owed on all mortgages in arrears in the US.