CBA Avails $100 million loan from US
Commonwealth Bank of Australia or CBA was able to get a loan of $100 million from the US Federal Reserve’s discount window at the peak of the global financial crisis in 2008.
The bank first availed a loan of $75 million on July 17 and this was followed by a $25 million loan on November 12 of the same year. These data were revealed after Bloomberg News and Fox News requested for some documents in the US through the Freedom of Information Act.
A spokesman of CBA was quick to say that there was really nothing to delve into with the transactions. He added by saying that “given the fragility of markets at this time, the group was taking the precautionary measure of trialling our access to various central bank windows to ensure that our systems and processes were in order should the situation worsen such that we needed emergency funding.’”
It can also be noted that Bankwest also availed a loan from the US Federal Reserve in the amount of less than $5 million. Eventually, it was sold to CBA for its incurred losses. Futhermore, Westpac and National Australia Bank together borrowed billions of dollars from the US Federal Reserve in December.
The Fed Window was widely popular at the time the Lehman Brothers Holdings collapsed.
Three years after Bloomberg requested for the loan documents, the Fed released thousands of loan documents by banks under court order. There is a total of 894 files with 29,346 pages that revealed the names of the institutions that borrowed money directly from the US Federal Reserve.
It was discovered that the National Bank of Australia was the bank with the biggest loan of US$4.5 billion. A New York-based bank also borrowed US$1 billion dollars from the Fed with a collateral of US$3.3 billion.
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Source: http://www.brisbanetimes.com.au/business/cba-got-100m-loan-from-us-20110403-1ct70.html
