Reply #3: Fed Lending Secrets Revealed

[ozymandius]

The Fed was open to just about any entity that needed money to stay afloat. This would seem to fall outside the Fed's core mission.

The Term Auction Facility had been established to allow banks confidential access to low-cost Fed loans while avoiding rumors of poor liquidity that could have sparked panic or a run.

France's Societe Generale, Switzerland's UBS, Belgium's Dexia, and Germany's Bayerische Landesbank, Dresdner Bank and its now-partner Commerzbank were all frequent users, each drawing down billions of dollars.

Many major US banks also used the facility, but the scale of use by non-US banks is likely to fuel anger that US cash aided foreign firms.

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The number of firms and the amount of American money used to keep them afloat will anger many who see this as a breach of the Fed's charter.