It has become clear that the European banks, particularly the Inter-Alpha Group and British banks, are among the ten dependent on the total of $16 trillion in bailout money distributed across the Federal Reserve's various liquidity bailout funds.
The Daily Telegraph reports that British banks alone got $1.5 trillion of the $3.3 trillion of the TARP funds. At the top of the list was Barclays, which borrowed $863 billion, with almost half coming in overnight loans through the Primary Dealer Credit Facility, which is the Fed program to help those banks that deal in U.S. Treasuries. Barclays claims to have paid this back, adding that much of it went to purchase Lehman Brothers assets, confirming that the U.S. taxpayer financed that purchase. The next on the list was Inter-Alpha's Royal Bank of Scotland with $446 billion; Bank of Scotland $181 billion; Abbey National (which is owned by Inter-Alpha's Banco Santander) $19 billion; and HSBC $10 billion.
The Financial Times reports that Barclays Bank was the biggest recipient of funds from the Term Auction Facility, which totaled $232 billion, which Barclays says was to fund purchases of Lehman assets. This was in the form of one- to three-month loans (from December 2007 until it closed this year), which, the FT writes, were often simply rolled over.
Besides Barclays, the other European banks among the top ten users of the TAF were Royal Bank of Scotland (Inter- Alpha); the French Société Générale (Inter-Alpha); Dresdner, which was taken over by Inter-Alpha's Commerzbank; Bäyerische Landesbank of Germany; and Dexia of Belgium. Today's briefing adds Santander to that list.
The Fed also bailed out the Swiss giant UBS, since it was the biggest seller of commercial paper to the Fed's Commercial Paper Funding Facility. Five of the top ten users of this facility were European banks.
