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Yes, You Too Can Borrow Billions From The Fed

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The news that AIG had asked the Federal Reserve to provide a bridge loan worth tens of billions set teeth gnashing everywhere across the universe of market watchers. The now time worn phrase moral hazard was trotted out. Weren't we supposed to be clawing our way out of this bailout business?
Our first reaction to the news that the insurance titan had gone hat in hand to the House of Bernanke was to ask: can they do that? We had fallen under the impression that the Federal Reserve lent money to banks, and more recently to investment banks. But we didn't think the Fed was in the business of bailing out insurance companies.
It turns out we were wrong. The Fed is authorized by Depression era amendments to the Federal Reserve Act to lend to pretty much anyone, as David Zaring at the Conglomerate points out. So long as the circumstance are "unusual or exigent" the Federal Reserve may open the discount window to any individual, partnership, or corporation.
Lately we've been feeling that our own finances are a bit unusual and exigent but somehow we doubt that the Fed is going to allow us to borrow from the discount window. Maybe AIG will have better luck.
Who Can Access the Fed's Discount Window? [Conglomerate]