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Lehman Brothers Secretly Borrowed From The Fed Before Collapse

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The central bank lent Lehman up to $18bn (£11.2bn) as part of a formerly undisclosed lending programme that specialised in month-long loans to banks and other financial institutions.

The disclosure of which banks tapped the programme, known as the single-tranche open-market operations, follows a request made by Bloomberg News under the Freedom of Information Act.

Lehman, whose bankruptcy triggered a deepening of the financial crisis in the autumn of 2008, borrowed $10bn from the programme in June of that year.

The disclosures are the latest by the Fed, which has drawn criticism for not being more transparent since the crisis about which institutions borrowed and when. The central bank said yesterday that the lending programme “supported the flow of credit to US households and business.”

JPMorgan Bailout?

Although no surprises that the Giant Squid was the biggest borrower.

Is this new news, or delayed news. I can recall some releases over what the Fed was upto but can't recall the exact details. If this is already in the public domain why is the Telegraph reporting it now?

Edited by interestrateripoff
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A month ago we reported about Bob Ivry's discovery that the Fed had been conducting a secretive bailout operation between March and December 2008, under which banks borrowed as much as $855 billion over the time frame for a rate as low as 0.01%. As the Fed itself explains following a just disclosed launch of a page dedicated to this Saint OMO, "The Federal Reserve System conducted a series of single-tranche term repurchase agreements from March 2008 to December 2008 with the intention of mitigating heightened stress in funding markets. These operations were conducted by the Federal Reserve Bank of New York with primary dealers as counterparties through an auction process under the standard legal authority for conducting temporary open market operations. In these transactions, primary dealers could deliver any of the types of securities--Treasuries, agency debt, or agency MBS--that are accepted in regular open market operations. By providing term funding to primary dealers, this program helped to address liquidity pressures evident across a number of financing markets and supported the flow of credit to U.S. households and business." Well, not really. As the chart below shows the banks, pardon primary dealers, that benefited the most from this secret iteration of Fed generosity were once again foreign banks, with the Top 5 borrowers being Credit Suisse, Deutsche Bank, BNP Paribas, RBS and Barclays.

Then there's this from Zerohedge.

Edited by interestrateripoff
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I see that they weasel worded in Mortgage Backed Securities as collateral for the loans, in addition to the 'higher rated' securities. Loans at those incredibly low rates of interest is just free money, I cant see how that can be legal. The Banana republic of the United States it is.

Edited by leicestersq
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aye,thank heavens for the greeks hey?

Greece, Portugal, Eire, UK etc = Passengers.

They're not driving the debt train, or laying down the tracks. You could argue they should not have climbed aboard in the first place. However the 'money' launderers creators would never have allowed this. Maybe getting shot for refusing to go over the top during the battle of the Somme equates to a better analogy.

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  • 439 Brexit, House prices and Summer 2020

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