MORE HIDDEN STUFF

Banks extend lines of credit to companies and don't have to put the entire amount on their books. All they have to do is put whatever the companies have tapped into. When the Fed decided to get into the commercial paper market, it saved the banks from having to put the rest of the lines of credit on their books and that would have forced them to raise more capital to support the loans.

ABCPMMMFLF Spells Fed Relief for JPMorgan, Citi Shadow Banking

By Bradley Keoun

Nov. 17 (Bloomberg) -- The U.S. Federal Reserve's emergency lending programs, intended to thaw commercial paper and money markets, are also helping banks limit losses from some of their $4 trillion in off-the-books guarantees and loan commitments.

A Fed program to buy as much as $1.8 trillion of short-term debt from U.S. companies means they don't have to tap backup credit lines provided by banks, which would have forced JPMorgan Chase & Co., Citigroup Inc. and other financial institutions to record the loans on their balance sheets and raise more capital. Another Fed program, with the acronym ABCPMMMFLF, aims to shore up the $1 trillion market for asset-backed commercial paper issued by off-the-books financing vehicles guaranteed by banks.

The 30 biggest U.S. banks hold about $1 of capital for every $11 of ``risk-weighted assets,'' a figure that encompasses assets both on and off the balance sheet, Scott said. Off-books assets get about half the risk-weighting as those on the books, which means banks are required to hold about half the capital.