Baltimore Sun

March 20, 2008

Three of the nation’s largest investment banks said they have borrowed from a program created this week by the Federal Reserve to stimulate lending amid concern that Wall Street faced a cash shortage.

“We have tested the window because we want to remove the stigma from the window,” said Morgan Stanley Chief Financial Officer Colm Kelleher in an interview yesterday, referring to the Fed lending program. “It’s meant to be there for normal business. It’s not meant to be there as a last-recourse thing.”

Erin Callan, chief financial officer of Lehman Brothers Holdings Inc., said the company used the window Tuesday night, adding: “We wanted to show some leadership.”

Michael DuVally, a spokesman for Goldman Sachs Group Inc., said his firm also is “testing” the Fed facility, which opened Monday, and will use it “if doing so makes sense from an economic and funding diversification point of view.”

Wall Street firms were reluctant to turn to the Fed earlier this week because of concern that it might make them appear financially weak, The Wall Street Journal reported yesterday.

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