Lehman borrows from new Fed facility


Lehman Brothers Holdings borrowed a small amount from a new Federal Reserve lending facility that allows investment banks to borrow money directly from the central bank, the Wall Street Journal reported on Wednesday.

Lehman borrowed the money through the facility, which was announced over the weekend and makes money available to securities firms on much the same conditions as the Fed's discount window, late on Tuesday, the paper reported, citing an unnamed person familiar with the transaction.


A Lehman representative was not immediately available to comment.


The Wall Street Journal also reported that Goldman Sachs Group is likely to tap the facility before the end of the week.

Goldman Sachs Chief Financial Officer David Viniar said on a conference call on Tuesday that the broker will likely tap the Fed facility as a new source of liquidity, but had not yet done so.

The new Fed lending facility is part of a move aimed at stabilising financial markets. It was announced in concert with a decision to approve a special financing package arranged to facilitate JPMorgan Chase & Co's purchase of ailing Bear Stearns. (Reuters)

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