Investment houses borrow billions from Fed
WASHINGTON (AP) - March 20, 2008 The lending is part of a major effort by the Fed to help a
financial system in danger of freezing.
Those large firms averaged $13.4 billion in daily borrowing over
the past week from the new lending facility. The report does not
identify the borrowers.
The Fed, in a bold move Sunday, agreed for the first time to let
big investment houses get emergency loans directly from the central
bank. This mechanism, similar to one available for commercial banks
for years, got under way Monday and will continue for at least six
months. It was the broadest use of the Fed's lending authority
since the 1930s.
Goldman Sachs, Lehman Brothers and Morgan Stanley said Wednesday
they had begun to test the new lending mechanism.
On Wednesday alone, lending reached $28.8 billion, according to
the Fed report.
