Banks begin borrowing from FED for Y2K LIQUIDITY CRISISgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
[For educational/Research Purposes Only]
NEW YORK, Nov 4 (Reuters) - The Federal Reserve Bank of New York said on Thursday banks had made the first significant borrowings this week from the discount window using special terms set up to handle year-end liquidity needs.
The Fed said banks borrowed $210 million on Wednesday at the discount window under the special facility which allows for expanded collateral.
Fed officials said it was the first time they had seen ``significant borrowings'' under the facility which was created to address any year-end liquidity problems related to concerns over the Y2K computer bug.
Discount window borrowings under the special facility up until now had been minimal, the Fed said.
The New York Fed, the U.S. central bank's arm in financial markets, announced in September it will accept a broader array of collateral at its discount window.
The bulk of financial markets' daily operations is usually easily financed by borrowing against top-grade collateral -- mostly U.S. Treasuries.
Now a broader array of debt instruments may be used as collateral in discount window borrowings. Fears of Y2K computer glitches may make liquidity harder to get or more expensive than usual in the computer-driven banking system.
[SNIP OBLIGITORY EXPLANATION OF PROBLEM]
Oooohhhhh baby! ARE YOU READY TOM RRRRRUUUUUUUUUUUMBLE !?!?!?!
-- Dennis (firstname.lastname@example.org), November 08, 1999
Damn rented fingers....
-- Dennis (email@example.com), November 08, 1999.