UK banks borrowed more than $1 trillion from US Federal Reserve

British banks borrowed more than $1 trillion (£640bn) from the Federal Reserve during the financial crisis, led by Barclays following its swoop on the US business of Lehman Brothers.

Dees Illustration

Richard Blackden and Harry Wilson
Telegraph

The disclosures came because the Dodd-Frank Wall Street Reform Act forced the Fed to reveal which banks and companies it lent money to in an effort to shore up the financial system from the end of December 2007 onwards.

It released the details of more than 21,000 individual transactions on its website on Wednesday, which showed that British banks represented more than a third - about $1.5 trillion - of the $3,300bn lent by the US authorities to prop up the financial sector.

Barclays borrowed $863bn from the Fed, with almost half coming in overnight loans through the Primary Dealer Credit Facility, a programme established by the central bank to help those banks that deal in US Treasuries.


Barclays has since repaid all its loans and said that much of its then borrowing was down to its purchase of Lehman’s US business.

Royal Bank of Scotland borrowed $446bn, Bank of Scotland $181bn, Abbey National $19bn and HSBC borrowed less than $10bn.

The figures for the banks represent the total amount they borrowed and not the total outstanding borrowing at any one point.

RBS said it no longer used any of the Fed scheme and had “significantly reduced” its borrowing from central banks.

The Fed said on Wednesday that the fact banks from across the world has tapped its emergency lending “reflected the severe market disruptions during the financial crisis and generally did not reflect participants’ financial weakness”.

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Doomsayers are selling Britain short, says top fund manager

Tom Dobell, manager of M&G Recovery, believes the UK has plenty to offer investors during the recovery.

Ian Cowie
Telegraph

Don’t get Tom Dobell started on bankers. The manager of M&G Recovery, a £6bn fund with 100,000 investors, tells me: “I am astounded at the way banks have abused their taxpayer guarantee. They have behaved atrociously and have done a huge amount of damage to our country.

“Some of these people have behaved disgracefully. It is amazing what you find out about in fund management. You get to see the best and worst of human nature; sometimes on the same day. HSBC is the only bank I would cross the road for. It is conservatively capitalised and its management has more integrity and corporate culture than the rest of them put together.”


Mr Dobell’s scorn is quite different from the populist claptrap produced by politicians almost every day (yes, Vincent, I mean you). During a lost decade in which the FTSE 100 index of Britain’s biggest shares fell by 15pc, M&G Recovery more than doubled investors’ money.


So the opinions of its manager about who is to blame for the mess we are in and the prospects for Britain’s economic recovery – or the risks of a double-dip recession - are better informed than most. He recently celebrated his tenth anniversary at the helm of the flagship fund of M&G - the company that introduced unit trusts to Britain - and emphasises that he buys or shuns individual shares rather than backing an economy.

But this usually quietly-spoken farming man from Somerset is emphatic that the pessimists are wrong and that those who believe them are not only selling Britain short but missing major opportunities to make money.

Speaking before this week’s better-than-expected gross domestic product (GDP) figures eased fears of economic stagnation, he said: “Detractors are ten a penny and, unfortunately, a lot of people see the glass as half empty but I am pretty optimistic and believe there are great opportunities for some British companies.

“We look to identify unloved businesses with honest hard-working managers, good strategies and the cashflow that comes from that. The aim is to buy low, when they are being bashed from pillar to post, and then sell high when they have bounced back.”

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UK Ministers plan huge sell off of Britain's forest to cut the deficit

Editor's Note: Economic hitmen move in for their pound of flesh in Britain. Surely the government will underestimate the value of their forest resources so the banks henchmen get a very good deal on one of the only remaining public assets in the U.K.

Patrick Hennessy and Rebecca Lefort
Telegraph

Caroline Spelman, the Environment Secretary, is expected to announce plans within days to dispose of about half of the 748,000 hectares of woodland overseen by the Forestry Commission by 2020.

The controversial decision will pave the way for a huge expansion in the number of Center Parcs-style holiday villages, golf courses, adventure sites and commercial logging operations throughout Britain as land is sold to private companies.

Legislation which currently governs the treatment of "ancient forests" such as the Forest of Dean and Sherwood Forest is likely to be changed giving private firms the right to cut down trees.

Laws governing Britain's forests were included in the Magna Carta of 1215, and some date back even earlier.

Conservation groups last night called on ministers to ensure that the public could still enjoy the landscape after the disposal, which will see some woodland areas given to community groups or charitable organisations.

However, large amounts of forests will be sold as the Department for the Environment Food and Rural Affairs (Defra) seeks to make massive budget savings as demanded in last week's Spending

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Doomsday Denial: Collapse 2.0 looms as UK calm before storm

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The UK is bracing itself to hear about public spending cuts worth tens of billions of pounds. The coalition government will reveal the comprehensive spending review on Wednesday. It aims to dramatically cut the budget deficit and put the country on the road to financial recovery. But some economists says the worst is yet to come.


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