The deed is done, and the world is a better place. At least the stock market is higher.
The Federal Reserve, pursuant to a provision of the Dodd-Frank legislation on financial regulation, released details on its website yesterday in lending that took place between December 1, 2007, and July 21, 2010.
We now know that was on the receiving end of the Fed credit for the financial panic of 2008 and its aftermath, the number of these institutions provided, when asked to borrow, what interest rate you pay and how much and what kind of guarantees that pledged to secure loans from the Federal Reserve.
For example, we learned that Bank of America Corp. reported the highest level of security of shit (Be-skilled or less) loans totaling $ 688,918.10 from the Fund for the primary dealer credit.
Now that most of the loans have been repaid and the financial markets are operating on their own, there was little threat to disclose data on lending by the crisis.
We still have to learn all the details of bank loans in the discount window of the Fed, a lender of last resort in operation since 1914. The Federal Reserve has always kept information on their counterparts from nearby, and for good reason.
Data scrubbing
In the old days - in the years 1970 and 1980, for example - that travel operators and analysts on Thursday, Federal Reserve data released overnight for signs of an increase in discount window loans on the last day of term settled in two weeks. (It was then that the banks have to reconcile their minimum reserve deposits.) If the number was unusually large loans on Wednesday in a certain district of the Fed, traders gradually reduce the potential candidates and settled on a . Rumor or reality, the bank may have trouble finding itself.
Such information had the power to create disturbances in the market, said Ward McCarthy, chief economist at Jefferies & Co. in New York. "It did increase the speculative nature of the financing market at that time."
I remember one time during the first Gulf War in 1991, when the funds rate soared to 100 percent (which is an annualized rate) on the day of settlement. However, some bank paid the price instead of incurring the stigma of going to the discount window. The Fed had to practically beg the banks to use discount window loans during the financial crisis.
the release yesterday of about 21,000 transactions totaling $ 3,300,000,000,000 was a delight to Maven data. For the enemies of the central bank, was a triumph of good over evil. For the opponents of the secret of the Fed, was a victory for transparency.
Reality Check
For most of us, I dare say that the data was ancient history: good to have when you want to entertain his grandchildren with stories about World Week almost over, but nothing that going to change their behavior or because you to get their money from the bank.
Sure, there were a number difficult to upend gentle stories. For example, Goldman Sachs Group Inc., has maintained that he had no need of emergency loans from the Fed to survive after the collapse of Lehman Brothers Holdings Inc. in September 2008. Fed data show that Goldman had 35.4 billion U.S. dollars of outstanding loans through the Loan Fund and Term Securities Primary Dealer Credit Facility on October 21, 2008. That represented more than 70 percent of book value of the company.
Data Dump the Fed, which is becoming a reality for journalists and bloggers for items gotcha, is less embarrassing for financial institutions Wikileaks release 'State Department cables - referring to French President Nicolas Sarkozy an "emperor with no clothes" - went to foreign dignitaries.
Sun shines on
Most of the lending crisis facilities have been closed - without incurring the Fed credit losses, the central bank said in its press release.
Through the years, the Fed has been lifting the veil on its internal functioning. It was not long ago (before 1994) the financial markets had to guess the policy changes. Now they are announced at the time.
Dodd, Frank, passed in July, requires disclosure of discount window loans, starting July 2010 transactions with a delay of two years. That's enough to protect financial institutions teetering bank runs and destabilize financial markets and still young enough to be of any historical value.
The world does not end with yesterday's revelation of loans financial crisis yesterday. Delayed data on discount window loans must be equally benign.
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