NEW YORK (Reuters) – Citigroup, Bank of America Corp. and three other top banks took the rare step of borrowing more than $2 billion total from the U.S. Federal Reserve … in a bid to reassure markets and remove the stigma of getting short-term financing from the central bank…
Borrowing money directly from the Fed has historically been seen as a sign of weakness, but Bank of America, Germany’s Deutsche Bank JPMorgan Chase & Co, and Wachovia Corp said they did it for the sake of the financial system. All five banks emphasized they have access to other, cheaper funds.
Translation: the Fed asked us to borrow from the discount window so people won’t worry when banks do. But we want you to know we’re just doing them a favor, because if we had to borrow from the Fed, you would be right to worry.
How convincing.