[lbo-talk] borrowing as a public service

Doug Henwood DHENWOOD at PANIX.COM
Wed Aug 22 10:21:42 PDT 2007


[This is a little odd: we're borrowing from the discount window to show it's ok? Not because we're strapped for cash and don't want to say that lest we scare the hell out of everyone? According to the FT, Deutsche Bank did a similar thing last Friday, and for similar reasons.]

NEWS ALERT from The Wall Street Journal

Aug. 22, 2007 Four major U.S. banks said they have each borrowed $500 million from the Federal Reserve's discount window, becoming the first to say they have taken advantage of the central bank's latest attempt to add liquidity to the credit markets. Citigroup said it is "pleased to inject liquidity into the financial system during times of market stress." Minutes later, J.P. Morgan Chase, Bank of America and Wachovia issued a joint press release saying they also borrowed $500 million each. The trio said "the companies believe it is important at this time to take a leadership role in demonstrating the potential value of the Fed's primary credit facility and to encourage its use by other financial institutions."

For more information, see: http://online.wsj.com/article/SB118779988225905435.html?mod=djemalert



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