One who intends to leave others better off for his having existed.

12/7/14

"Report To The Secretary Of The Treasury From The Treasury Borrowing Advisory Committee"

"7/30/2008

...The analysis showed how the initial introduction of the TAF (Term Auction Facility) program in December '07 quickly improved funding strains into year-end, and was later enhanced by the increase in the TAF in early January, although global equity market volatility soon unwound some of this benefit.

Subsequent to this however, further TAF increases and the introduction of the TSLF (Term Securities Lending Facility) and PDCF (Primary Dealer Credit Facility) have reduced the term interbank premium in 1-month money, yet 3-month money remains persistently wide.  The conclusion was that the growth in size of the TAF has had a tangible impact on Libor/OIS spreads, and that a 3-month TAF would further alleviate funding pressure.

The data shows that while early TAF results demonstrated strong performance, the results were much closer to interbank levels than OIS during March, while concerns that the Libor fixing process understated the true cost of borrowing in the interbank market.

The "stigma" associated with Discount Window borrowing may have contributed to the TAF trading like the interbank markets, as banks paid up to access money away from the Window.

The member notes that, while the TAF program was widely accepted and utilized, the TSLF was not as widely utilized at inception..."

http://www.treasury.gov/press-center/press-releases/Pages/hp1094.aspx
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Too Connected to Jail

Former Wachovia CEO Robert Steel, Under Secretary for Domestic Finance of the United States Treasury until July, 2008, after a vice chairman of Goldman Sachs, appears to have known much more about how many financial institutions recieved TAF money, and then sold Wachovia to Wells Fargo for much less than it was worth, because he, along with others including Wells Fargo CEO John Stumpf, didn't tell the public how much they could borrow from the Federal Reserve Bank of New York under TAF etc...

The Federal Reserve Bank of New York's Chairman at the time was former Goldman Sach's Stephen Friedman and the President was Timmy Giethner, who, along with the SEC, let financial institutions borrow without mandating disclosure of terms including total credit lines.

If the credit lines were public, Wachovia would not have merged with Wells Fargo.

http://hartzman.blogspot.com/2014/12/too-connected-to-jail.html
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"Term Auction Facility

...In December of 2007, the Federal Reserve introduced the Term Auction Facility (TAF), which provided credit to depository institutions through an auction mechanism. All regular discount window loans and TAF loans must be fully collateralized to the satisfaction of the lending Reserve Bank, with an appropriate haircut applied to the collateral; in other words, the value of the collateral must exceed the value of the loan...

On December 12, 2007, the Federal Reserve created the TAF to improve depository institutions' access to term funding. The TAF provided credit through an auction mechanism to depository institutions in generally sound financial condition. The TAF offered 28-day and, beginning in August 2008, 84-day loans."

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

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