Banks face challenge from Fed in ARS buybacks

08/28/2008 | Financial Times (free content)

A spokesman with the Federal Reserve Bank of New York said the Fed does not accept preferred auction-rate securities -- issued by closed-end funds -- as collateral against loans from its funding window. The Fed's discount window may have been key to banks' plans for repurchasing billions of dollars in ARS. Collateral must qualify as debt, and preferred ARS are a debt-equity hybrid.

View Full Article in:

Financial Times (free content)

Published in Brief: