Rivers of ink have been spilt on the crisis that gripped the world’s financial system between 2007 and 2009.

Yesterday’s huge release of data by the US Federal Reserve chronicles a similar story, but in numbers. A lot of numbers.

The Fed’s release, prompted by an order from Congress, details more than 21,000 transactions that enabled US authorities to dole out $3,300bn to banks and companies in the worst downturn since the Great Depression. The picture is one of a global financial system in desperate need of short-term funding.

In the credit boom that preceded the crisis, short-term debt and loans became the lifeblood of modern finance. When they dried up in 2007 after the collapse of the US housing market, banks and hedge funds were left gasping for air.

From huge multinationals such as Citigroup and General Electric to small funds and Germany’s Landesbanken, the list of participants to the six Fed programmes is a who’s who of modern finance.

The data on the primary dealer credit facility (PDCF) underlines how large banks that routinely funded themselves with overnight loans were forced to rely on the Fed’s help.

The programme was established in March 2008, when private lenders in the repurchase, or repo, market stopped supporting Bear Stearns, the stricken investment bank later bought by JPMorgan Chase.

The PDCF enabled dealers to gain access to overnight funds from the Fed instead of the repo market. Its use is a barometer of the pressures that afflic­ted various banks once the crisis began in September 2008.

The greatest cumulative user of the PDCF was Merrill Lynch, through its New York and London operations, followed by Citigroup and Morgan Stanley. Merrill, now part of Bank of America, became a heavy user of the facility in late September, borrowing $33.2bn on September 26 alone. Its daily demand would not drop below $10bn until Christmas eve.

Barclays of the UK drew down $47.9bn on September 18 as it absorbed Lehman Brothers, which before its bankruptcy had $16bn in term funding and made heavy use of the PDCF after it filed for bankruptcy on September 15.

After Lehman’s demise, Morgan Stanley borrowed hefty amounts into October: – its PDCF borrowing peaking at $61.3bn on September 29, while at the same time it borrowed about $36bn in term funds under a separate Fed facility – as both its London and New York arms needed short-term funding amid investors’ concerns for its future.

Morgan Stanley said it had disclosed its use of some Fed facilities and had repaid the loans.

Morgan Stanley tapped the PDCF facility 212 times over the crisis. Its archrival, Goldman Sachs, used it only 84 times, with peak daily borrowing of about $24bn – less than most rivals but perhaps enough to question its executives’ assertions that it did not need government help.
Reporting by Francesco Guer­rera, Michael Mackenzie, Justin Baer and Patrick Jenkins