The Federal Reserve’s own accounting shows that the portfolio of assets it took as security for the guarantee of Bear Stearns liabilities is droping fast, losing 9 per cent in the last quarter alone.
Fed spokesman CNBC reporter Steve Liesman writes:
The value of the Bear Stearns’ portfolio held by the Federal Reserve hase declined 9% to $26.8 billion from $29.5 billion last quarter, the Fed said.
The portfolio is now valued at $2 billion less than initial loan to JPMorgan Chase earlier this year.
The Fed balance sheet was unchanged in the latest week at $1.7 trillion. Commercial bank borrowing from Fed discount window rose by $5.7 billion, to $107.5 billion.
Investment bank borrowing from Fed discount window fell by $31.4 billioin, to $102.4 billion, in the latest week.
Banks borrowed $107.9 billion from the Fed to purchase commercial paper from money markets, down $14.9 billion in latest week.
AIG borrowing from the Fed rose to $90.3 billion from $82.9 billion last week.