Busted: Bankers and The Global Economy

February 26, 2008

Another Unprecedented Reserve Auction

Filed under: banking, credit, federal reserve — Tags: , , , , — digitaleconomy @ 12:17 pm

Federal Reserve Bank Commercial Banking Auction

On February 25, the Fed’s Reserve Auction hit a new landmark for commercial banks applying for help. On $30 billion available, $67.958 billion in credit requests were made, a 126% demand level over available short-term funds. 72 bidding banks participated, up from 66 bidding commercial banks on February 11. This reflects a true level of stress in the banking market. This also does not account for any funding refused because of improper collateral levels since the Fed requires sufficient collateral for short-term funding.

Previous TAF Auctions:
02/11/08 – $30 billion – $58.400 billion – 66 bidding banks
01/28/08 – $30 billion – $37.452 billion – 52 bidding banks
01/14/08 – $30 billion – $55.526 billion – 56 bidding banks
12/20/07 – $20 billion – $57.664 billion – 73 bidding banks
12/17/07 – $20 billion – $61.553 billion – 93 bidding banks

Release Date: December 21, 2007
The Federal Reserve intends to conduct biweekly Term Auction Facility (TAF) auctions for as long as necessary to address elevated pressures in short-term funding markets. The Board of Governors will announce the sizes of the January 14 and January 28 TAF auctions at noon on January 4.

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