DealBook: How Banks Pawned Junk to the Fed

As part of an emergency loan program, the Fed accepted as collateral more than $1 trillion in junk-rated investments from Citigroup, Morgan Stanley and others, according to data released Wednesday by the Fed. Banks pledged more than $490 billion in particularly risky collateral –  which credit rating agencies classified as Triple-c or below. Some collateral included mortgage-backed securities and other risky investments.

DealBook: How Banks Pawned Junk to the Fed

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