2nd UPDATE: Fed Unveils More Details Of Crisis Loans

Goldman Sachs Group Inc. (GS) took the biggest single sum and was given the best rate on two Federal Reserve loans in December 2008, the latest disclosure of the central bank's controversial actions at the height of the financial crisis showed.

Following a Freedom of Information Act request by Bloomberg News, the Fed Wednesday disclosed the details of 28-day loans made to the biggest Wall Street firms from March to December 2008. This short-term lending program to banks, known as single-tranche term repurchase agreements, peaked at $80 billion in April 2008, a month after the collapse of Bear Stearns, which marked the prelude to the crisis.

The overall amounts of this lending program had been disclosed but details about individual banks' borrowing had not. Goldman Sachs Group Inc., Credit Suisse Securities, Barclays Capital and RBS Securities were among the banks that took advantage of the low-rate loans.

Goldman took the biggest loan on Dec. 9, 2008, borrowing $15 billion at a 1.16% rate, the Fed said. Borrowing rates were as low as 0.01% for a $200 million Goldman loan on Dec. 30, and as high as 3.76% for a $10 billion loan to RBS on Oct. 7.

Though Goldman took the biggest single loan, its $53.4 billion total was lower than what other banks borrowed from the repurchase open market operations. Two foreign banks were the main users: Credit Suisse tapped the Fed 57 times for a total of $259.3 billion, while Deutsche Bank got $101 billion by going to the U.S. central bank 37 times.

The Fed has been forced to disclose the details of its controversial lending practices and rescue efforts during and in the aftermath of the financial crisis following scrutiny by Congress and lawsuits brought about by media companies. Critics have assailed the Fed for helping Wall Street banks and supporting American International Group Inc. (AIG) at taxpayers' expense, but the central bank has rebutted the rescues avoided a bigger economic collapse.

"These operations were conducted through competitive auctions with primary dealers in an open and transparent manner," a New York Fed spokesman said of the latest disclosures. "This program helped to alleviate strains in financial markets and support the flow of credit to U.S. households and businesses," he added.

A spokesman for Goldman Sachs declined to comment. Credit Suisse and Deutsche Bank were not immediately available for comment.

At the end of 2010, the Fed was forced by the Dodd-Frank financial law to lift the veil of secrecy on nearly all the $3.3 trillion worth of credit it funneled to different parts of the economy and the financial system during the crisis. That was followed by a March disclosure of the loans made directly to banks under the Fed's discount-window, following lawsuits from Bloomberg L.P.'s Bloomberg News and News Corp.'s (NWSA, NWSB) Fox Business Network.

Details of the latest Fed disclosure can be found at:

http://www.federalreserve.gov/monetarypolicy/bst_tranche.htm

-By Luca Di Leo, Dow Jones Newswires; 202-862-6682; [e-mail]