European bank 'borrowed from US Federal Reserve on top of home country aid'

6 April 2011

A European bank that received the most help from the US Federal Reserve discount window during the financial downturn also received billions of dollars in aid from its home countries, it has been found.

In addition, Bloomberg News reports that Dexia SA - which is based in Brussels and Paris - owned subsidiaries implicated in bid-rigging that prosecutors claim defrauded taxpayers in the US.

Lending figures showed that the bank borrowed as much as $37 billion.

It was revealed that an average daily loan amount of $12.3 billion took place in the 18 months following the collapse of Lehman Brothers Holdings.

Matt Fabian, a senior analyst and managing director at Municipal Markets Advisors, said: "If Dexia went bankrupt, it could have been a catastrophe for municipal finance and money funds."

Bloomberg recently reported that the US Federal Reserve is to face a bank lawsuit filed by TCF National Bank, which will centre on the way large banks in the country can collect for debit card transactions.

By Gary Cooper

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