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Board of Governors of the Federal Reserve System
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Informing the public about the Federal Reserve

Why did the Federal Reserve lend to foreign institutions during the financial crisis?

Consistent with provisions in the Federal Reserve Act, branches and agencies of foreign banks operating in the United States have the same access as domestic banks to the Fed's discount window, which is used for borrowing short-term funds. Moreover, many foreign-owned institutions operating in the United States experienced funding problems similar to those experienced by domestic institutions. Addressing the funding problems of both domestic and foreign-owned financial institutions operating in the United States was essential to restore the flow of credit to U.S. households and businesses and to encourage a stronger economic recovery and a return to full employment. 

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Last update: August 2, 2013