The Fed preempts the release of its US economic conditions report later on Wednesday with a fresh monthly release pertaining to its balance sheet and reserves.
Readers may recall that news agencies like Bloomberg filed freedom of information requests a-plenty to get the Fed to come clean on just what’s been going on within its credit and liquidity programmes.
Thanks to the latest report, entitled the “Federal Reserve System Monthly Report on Credit and Liquidity Programs and the Balance Sheet”, we now have a little more insight. As the Fed states in the report:
For many of the Federal Reserve’s credit and liquidity programs, the new information in the report includes the number of borrowers and borrowing amounts by type of institution, collateral by type and credit rating, and data on the concentration of borrowing. The report also includes information on liquidity swap usage by country, quarterly income for important classes of Federal Reserve assets, and asset distribution and other information on the limited liability companies created to avert the disorderly failures of Bear Stearns and American International Group.
However, they do stop short of naming institutions outright. Reporting the story for CNBC, Steve Liesman quipped the Fed might as well have called it the White Wash book.
Nevertheless the following charts of “selected” assets do portray some interesting trends, namely ongoing growth in the number of securities held outright at the Fed (click to enlarge):
The report goes on to highlight the drawing down of the main Fed programmes with great detail too, including sums drawn as well as type and rating of collateral used for each facility (including the TALF).
Here, for example, is the breakdown given of the Fed’s discount window use in the last four weeks – perhaps the best reflection of short-term banking distress :
As shown, 378 institutions made use of the facility in the last month, at an average of $448bn in total borrowings, the Fed noting that “Credit provided to depository institutions through the discount window and the Term Auction Facility (TAF) has declined of late, primarily reflecting reductions in loans outstanding under the TAF”.
Meanwhile, the type of collateral pledged to make use of all the Fed’s facilities in the last month came in at a value of nearly $1,000bn, and looked like this:
And here’s how it was rated:
The key takeaway for the primary dealer credit facility being that:
Borrowing at the Primary Dealer Credit Facility (PDCF) and Term Securities Lending Facility (TSLF) has declined substantially over recent weeks as conditions in money markets reportedly have improved.
Related links:
Federal Reserve System Monthly Report on Credit and Liquidity Programs and the Balance Sheet – Fed
Fed Would Be Shut Down If It Were Audited, Expert Says – CNBC