Fed Reveals Details of $3.3 Trillion Emergency Loans During Financial Crisis

The US Federal Reserve has published details of over 21,000 transactions, totaling more than $3.3 trillion, carried out to support the banking system during the financial crisis. The emergency loans, dispensed between December 2007 and July 2010, included hundreds of transactions with major banks such as Royal Bank of Scotland, Barclays Capital, and Lloyds Banking Group. Notable corporations, including General Electric, AIG, and GMAC, also accessed the Commercial Paper Funding Facility established by the Fed in October 2008. The disclosures come as a result of the Dodd-Frank Act, which requires greater transparency from the central bank.

Key Takeaways:

• The Fed released details of 21,063 transactions, totaling $3,335,551,000,000, in support of the banking system during the financial crisis.
• The transactions involved hundreds of emergency loans to major banks, including Royal Bank of Scotland, Barclays Capital, and Lloyds Banking Group.
• The Commercial Paper Funding Facility, established by the Fed in October 2008, provided support to General Electric, AIG, GMAC, and other corporate giants.
• The Fed's disclosure includes the details of the rescue of Bear Stearns in March 2008 and AIG in September 2008.
• The Fed has closed most of the lending facilities set up during the crisis, citing improved financial conditions.
• The Fed continues to hold an estimated $2 trillion-worth of assets purchased during this period.
• The disclosure also includes the details of "swap lines" made available to other central banks, enabling emergency liquidity assistance to RBS.
• No details were given on banks or businesses that received emergency loans through the Fed's "discount window" in this period.

Statistics:

• 21,063 transactions totaling $3,335,551,000,000 were made by the Fed to support the banking system during the financial crisis.
• The transactions involved 10 major banks, including Royal Bank of Scotland, Barclays Capital, and Lloyds Banking Group.
• The Commercial Paper Funding Facility provided $5,135,000,000 to General Electric alone.
• The Fed holds an estimated $2 trillion-worth of assets purchased during this period.
• The "swap lines" made available to other central banks enabled £36.6 billion in emergency liquidity assistance to RBS.
• No figures were provided on the number of banks or businesses that received emergency loans through the Fed's "discount window" in this period.

Sources:

• "New York Times, Alexandra Frean, Ian King, 27 March 2013"
• Dodd-Frank Act, Section 110.