Overseas banks accounted for about 70 percent of discount window loans when borrowing reached its peak of $113.7 billion in October 2008 according to the Fed’s data.-- That data was only released after Bloomberg and News Corp (Fox news) won a lawsuit to command the release. And there is worse. Especially for German banks.
From Bloomberg: Turns out the foreign banks got more than just the discount window loans (called loans of last resort) the Fed has given out for 125 years to stablize banks. There was also a brand-new lending mechanism, Term Auction Facility, that the Feds established in December 2007 to augment the discount window. Dexia, the bank based in Brussels and Paris, was a winner with those loans, too. They got 24 TAF loans totaling $105.2 billion. Dexia also tapped the Commercial Paper Funding Facility 42 times for a total of $53.5 billion.
The Fed extended the loans even as federal officials were investigating allegations that the bank’s subsidiaries colluded with others to defraud state and local governments.
We're lucky they have already repaid the loans. Because German banks have their own problems.
After all, the EU’s main concern is not Ireland. No, what the EU is desperate to maintain is the illusion that the EU’s banking sector in general, and Germany’s in particular, is sound and healthy. In reality, the German landesbanks, together with the Spanish cajas and the Austrian banks, are amongst the weakest in Europe in terms of their capital base, and the German banks have plenty of exposure to Ireland. In other words, keeping Ireland afloat is a critical part of Merkel’s strategy to keep its own banking sector alive. This very fact, which the German government is doing everything in its power to conceal, provides Ireland with a once-in-a-lifetime opportunity to renegotiate its borrowing terms.Source: Business Insider (March 1, 2011)
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