August 9, 2022

Goldman Took Biggest Loan in Federal Reserve Program

The Goldman Sachs unit borrowed $15 billion from the Federal Reserve on Dec. 9, 2008, the Fed said in data released on Wednesday. The Fed made 28-day loans from March 7, 2008, to Dec. 30, 2008, as part of an $80 billion initiative, the central bank said. The information was released in response to a Freedom of Information Act request by Bloomberg News.

The central bank resisted previous requests for more than two years and released information in March on its oldest loan facility, the discount window, only after the Supreme Court ruled it must release the data. When Congress mandated the December 2010 release of other data on the Fed’s unprecedented $3.5 trillion response to the 2007-9 collapse in credit markets, information about its so-called single-tranche open-market operations was not included.

Units of 19 banks received the loans, which were all repaid in full, according to the Fed. The units are known as primary dealers, which are designated to trade government securities directly with the New York Fed.

Lehman Brothers had two loans totaling $2 billion outstanding when its parent investment bank filed the biggest bankruptcy in American history on Sept. 15, 2008, the data show. Those loans were repaid on Oct. 8, 2008, the report said. Lehman’s peak borrowings from the program reached $18 billion on June 25, 2008, according to the data.

RBS Securities, a unit of a British bank, had $31.5 billion in loans outstanding on Oct. 8, 2008, and UBS Securities, part of Switzerland’s biggest bank, borrowed as much as $20.5 billion on Nov. 26, 2008, the Fed said.

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