The Fed's Loans: Foreign Firms Received Funds --- Data From Fed Show Lenders Got Emergency Cash
The Federal Reserve, forced by Congress to release details on trillions of dollars' worth of loans made during the financial crisis, disclosed the breadth of its lending to U.S. businesses desperate to raise cash and the surprising degree to which it supported struggling foreign banks in the worst days of 2008 and 2009.</br></br>The lending, most of which has been paid back, represents the Fed's most aggressive intervention in the economy ever, and included loans to stalwart industrial companies such as General Electric Co. and Verizon Communications Inc. Though the Fed has been credited with helping prevent many banks and firms from collapsing as credit markets stopped functioning, critics also say the Fed overreached and the latest disclosures could open new fault lines.</br></br>The scale of the Fed's lending was widely known. In all it funneled $3.3 trillion worth of credit to different parts of the economy and financial system through an array of different programs during the crisis. But the specifics of who got the money hadn't been known.</br></br>Foreign banks received hundreds of billions of dollars in short-term loans from the Fed. Among the biggest loans from a Fed commercial-paper lending program was one to Swiss banking giant UBS AG, which tapped it for $37 billion in October 2008. Barclays PLC, the British bank that declined to rescue Lehman Brothers but later bought much of it from bankruptcy, tapped the Fed for roughly $10 billion in commercial-paper loans in October 2008.</br></br>All the borrowings were repaid by the end of 2009, a Barclays spokesman said. A UBS representative said its borrowing was relatively modest, done to give it flexibility during the crisis and was fully repaid.