Foreign Banks Got Majority of Secret Fed Loans

Court forces Fed to release info
By Kevin Spak,  Newser Staff
Posted Apr 1, 2011 8:00 AM CDT
Foreign Banks Got Majority of Secret Fed Loans
Federal Reserve Chairman Ben Bernanke testifies on Capitol Hill, May 12, 2011, before a Senate Banking Committee hearing on the status the Dodd-Frank implementation.   (AP Photo/Harry Hamburg)

When the Federal Reserve opened its “discount window” at the height of the financial crisis, a lot of foreign banks lined up. The 97-year-old program hit an all-time high during October 2008, and during its peak week, 70% of the $110.7 billion doled out went to foreign banks, according to data the Fed has long tried to keep secret. Bloomberg obtained the documents after winning a court case over its Freedom of Information Act request.

The Fed had argued that revealing who borrowed from the window would put a stigma on those companies in the market. The foreign borrowers included a bank that makes loans to local governments in Belgium, a fishing-cooperative financier from Japan, and even a company co-owned by the Central Bank of Libya, among others. Of the top five banks who used the program at its height, only one—Wachovia—was American. (Read more Federal Reserve stories.)

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