WASHINGTON, Fri Sep 28, 2012 – The Federal Reserve on Friday named the banks that borrowed at its discount window during the third quarter of 2010, but the period showed very low levels of activity and none of the biggest Wall Street firms had turned to the facility for help.
Some of the decline in discount window borrowing may have reflected banks steering clear because they knew their actions would be disclosed, albeit with a two-year lag, once the Dodd-Frank financial reform law was passed.
However, Fed officials said it was impossible to know how much this may have been a factor in driving down discount window business, as opposed to what extent the lower level of borrowing just a reflection of market conditions at the time.
The data showed that Gorham Savings Bank of Gorham, Maine, and Commerce Bank of Kansas City, Mo., took the largest discount window primary credit loans. Gorham’s largest loan was $70 million during the period and Commerce’s was $60 million.
The data covers a wide range of Fed activities, including discount window borrowing and foreign exchange transactions, from July 22, 2010, which was the day after the passage of Dodd-Frank, until Sept. 30, 2010.
The discount window is a Fed lending facility that banks can access in times of stress and became essential to maintain functioning markets during the 2008 financial crisis.
The Fed document release was the first mandated by the 2010 Dodd-Frank financial reforms, but it also followed previous discount window disclosures forced on it by U.S. courts after several media organizations fought a stiff legal battle.