UK banks received one third of US bail-out funds

2nd Dec 2010 12:16

UK banks borrowed a third of the $3.3trn lent by the US Federal Reserve to keep the banking system afloat during the credit crunch, with Barclays alone borrowing over $860bn.News of the loans were revealed by disclosures under the newly introduced Dodd-Frank Wall Street Reform Act. The Fed detailed 21,000 transactions, out of which British banks represented more than a third at about $1.5trn.Barclays, following its purchase of Lehman Brothers, borrowed $863bn from the Fed. Over half of this was through overnight loans through the Primary Dealer Credit Facility. Barclays was also the biggest cumulative borrower from the Term Auction Facility (TAF) for one- to three-month loans, borrowing a cumulative $232bn from the TAF through various subsidiaries.Royal Bank of Scotland borrowed $446bn, Bank of Scotland $181bn, Abbey National $19bn and HSBC under $10bn. UBS, Societe Generale of France, Dresdner Bank of Germany, and Dexia of Belgium were also big users of the Fed's facilities. The figures are the total amount the banks borrowed over the period, not peak borrowing.Barclays and RBS both said they had now repaid all of the money borrowed from the Federal Reserve.Barclays said it had "repaid all the relevant facilities that it accessed in the USA by end December 2009", while RBS said it "no longer makes use of any Federal Reserve schemes".The Fed defended the use by overseas banks of its facilities saying it "reflected the severe market disruptions during the financial crisis and generally did not reflect participants' financial weakness".