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Fed provides further bailout details

Dec. 1, 2010 at 7:25 PM   |   Comments

WASHINGTON, Dec. 1 (UPI) -- The U.S. Federal Reserve revealed Wednesday the extent to which it was stabilizing financial markets at the height of the credit crunch.

The central bank opened a variety of lending facilities when the financial sector went quickly from wobbly to vertigo in the fall of 2008. At that point, banks clung to their cash, forcing corporations that use quick market loans to scramble for an alternative.

While banks were granted cash infusions through the $700 billion Troubled Asset Relief Program, the Fed's list shows the extent to which it was covering the financial industry's lending expectations.

The list includes 21,000 emergency loans the Fed granted to U.S. and foreign firms, The New York Times reported. Loans such as commercial paper lending are unsecured loans, available only for firms with high credit ratings.

The Fed said General Electric Co., Harley-Davidson Motor Co., Verizon Wireless and Toyota Motor Corp. all turned to the Fed for loans that generally last from a week to a month and are often used to meet payroll obligations.

The Fed also listed McDonald's Corp. as a borrower, but McDonald's issued a quick disclaimer.

"McDonald's Corp. was erroneously listed by the Federal Reserve Bank as a recipient of federal funds during the financial crisis of 2008," the firm said in a statement. "We believe the reason for the error is that McDonald's Corp. is inaccurately listed as the parent/sponsor company of Golden Funding Corporation, an independently-owned company which did receive federal funding during this period," the restaurant chain said.

The data show the Fed continued short-term lending to firms into the summer of 2009, even after the recession had officially ended.

© 2010 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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