By Kristina Peterson, Sarah Portlock and Ian Talley
WASHINGTON--First Tennessee Bank, a unit of First Horizon
National Corporation (FHN), was the biggest borrower of short-term
funds from the Federal Reserve during the fourth quarter of 2010,
following a technology glitch, according to data released
Friday.
Based in Memphis, Tenn., the bank borrowed $1.017 billion on
Nov. 24, 2010, the largest single loan during the period and bigger
than any other bank's total borrowing.
First Tennessee tapped the central bank's discount window once
because of a technology glitch that halted the wire transfer
service between the bank and its regional Federal Reserve bank on
the day before Thanksgiving in 2010. The technology problem
disrupted the ability of the bank's bond broker-dealer to settle
securities on the eve of a holiday, said the bank's corporate
treasurer, Tommy Adams.
In total, the banks borrowed $3.686 billion from the discount
window from October 2010 through December 2010. That included many
banks that borrowed money and rolled it over several days in
succession. Many loans were for a single day.
Although most of the discount-window borrowers were U.S.-based
banks, some of the Fed loans were made to local branches of foreign
banks. The New York unit of Spain's second largest bank, Banco
Bilbao Vizcaya Argentaria (BBVA), borrowed $200 million in the
quarter, making it the third largest discount-window lender in the
period. A spokeswoman couldn't immediately comment on the reason
for the loans.
The second-largest borrower was Grand Bank, N.A. of Hamilton,
N.J., which borrowed $417 million. A spokesman for the bank wasn't
immediately available for comment.
Other international banks to tap the discount window included
the Bank of East Asia (0023.HK), a Hong Kong-based bank that
services mainland China, which borrowed $15 million; the Taiwan
Cooperative Bank, which took out a $3 million short-term loan; and
the New York unit of one of Germany's largest banks, DZ Bank
(DZB.YY), which borrowed $5 million from the Fed.
The Dodd-Frank law requires the Fed to release each quarter the
details of borrowing from its discount window, from which banks can
obtain short-term loans, typically overnight. The information is
published with a two-year lag. The Fed began releasing the data in
late September.
Borrowing from the Fed's discount window surged during the
financial crisis, when borrowing in a single week from the facility
sometimes exceeded $100 billion. Discount window lending declined
over the course of 2010 to more normal levels. The central bank had
closed the emergency lending programs established during the
financial crisis and banks were generally in stronger shape.
The Fed had previously released details of banks' borrowings
during the 2008 financial crisis, in response to Freedom of
Information Act requests.
The central bank already publishes general information about the
size and composition of its balance sheet each week.
Write to Kristina Peterson at kristina.peterson@dowjones.com