To rank companies by how much they borrowed from the U.S. Federal Reserve during the financial crisis, Bloomberg News examined data the central bank was forced to release about seven programs.
The data were extracted from 29,000 pages of documents and 18 Fed-prepared Microsoft Excel spreadsheets listing more than 21,000 transactions. The records were made public in batches on Dec. 1, 2010, and March 31 and July 6 of this year. The Fed released some of them under the 2010 Dodd-Frank Act and the rest in responses to Freedom of Information Act requests by media outlets including Bloomberg News and related federal court orders. The data covered money borrowed from the central bank from August 2007 through April 2010.
More than a dozen lending programs were deployed by the Fed in response to the crisis. From those, Bloomberg News selected the seven available to a broad set of banks, brokerage firms and other companies. They included the Fed’s discount window, the last-resort lender for troubled banks, and six temporary measures: the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility; the Commercial Paper Funding Facility; the Primary Dealer Credit Facility; the Term Auction Facility; the Term Securities Lending Facility; and so-called single-tranche open market operations.
(View the Bloomberg interactive graphic to chart the Fed’s financial bailout.)
Many firms borrowed from two or more programs through multiple subsidiaries, all disclosed separately in the Fed data. The central bank didn’t detail how much each borrower had outstanding from all programs on any given day, a measure of vulnerability during the crisis.
Daily Total Balances
Bloomberg News combined the Fed’s loan data, including the amounts, dates and payoff deadlines, into a master Excel file to calculate daily total loan balances for each parent company.
Fed officials provided Bloomberg News with early payoff dates for a handful of loans, which are reflected in the analysis. Discount-window figures are based on daily outstanding-balance reports. Reports for 18 business days were missing from the Fed’s release. While money was likely owed during those gaps, it wasn’t feasible to determine how much, so discount-window balances were zeroed out for those days. As a result, some companies’ daily totals show sudden dips and spikes. In all other instances, the loans were assumed to have been paid off on their due dates.
Emergency measures that targeted specific companies -- Bear Stearns Cos., American International Group Inc., Citigroup Inc. and Bank of America Corp. -- were disclosed at the time and so were excluded. Loans to these companies from the other seven programs were included.
Loans from the TSLF program were included only after borrowers exercised rights purchased from the TSLF Options Program; options purchased but not used were excluded. The Central Bank Liquidity Swap Lines, which lent dollars to foreign central banks so they could in turn pass on the liquidity to institutions operating in their own countries, were omitted because the companies that ultimately got those funds haven’t been disclosed.
The analysis includes 394 companies that took loans from at least one of the six temporary programs and 13 more that were among the top discount-window borrowers. About 1,600 additional discount-window borrowers were excluded because their loan balances averaged less than $20 million a day.
The Fed data identified many borrowers using abbreviated names. In many instances, different banks had similar or even identical names. To differentiate the institutions and determine their parents, identifying characteristics in the documents such as cities and Fed districts were compared with Bloomberg’s global database of companies and subsidiaries, which include Federal Deposit Insurance Corp. and U.S. Securities and Exchange Commission filings.
Firms acquired during or after the financial crisis are listed separately from their new parents. Loans to Merrill Lynch & Co., for example, weren’t combined with those to Bank of America, which purchased the New York-based brokerage on Jan. 1, 2009.