Glitch Prompted Big Discount-Window Loan
WASHINGTON--First Tennessee Bank, a unit of First Horizon National Corp., was the biggest borrower of short-term funds from the Federal Reserve during the fourth quarter of 2010, following a technology glitch, according to data released Friday.</br></br>Based in Memphis, Tenn., the bank borrowed $1.017 billion on Nov. 24, 2010, the largest single loan during the period and bigger than any other bank's total borrowing.</br></br>First Tennessee tapped the central bank's discount window once because of a technology glitch that halted the wire-transfer service between the bank and its regional Federal Reserve bank on the day before Thanksgiving in 2010. The technology problem disrupted the ability of the bank's bond broker-dealer to settle securities on the eve of a holiday, said the bank's corporate treasurer, Tommy Adams.</br></br>In total, the banks borrowed $3.686 billion from the discount window from October 2010 through December 2010. That included many banks that borrowed money and rolled it over several days in succession. Many loans were for a single day.</br></br>Although most of the discount-window borrowers were U.S.-based banks, some of the Fed loans were made to local branches of foreign banks. The New York unit of Spain's second largest bank, Banco Bilbao Vizcaya Argentaria SA, borrowed $200 million in the quarter, making it the third largest discount-window lender in the period. A spokeswoman couldn't immediately comment.