[thaumasiotes]

> Had they failed, the bank would have had to go the the Fed, discount window and borrow $1 billion overnight at the discount rate (which would have been substantially more than we were paying in the repo market.) Additionally, it likely would have triggered process audits and incident reports which would have been far worse than the interest.

> because someone had keyed in a start of day position wrong

I know basically nothing about this area, but I'm curious why what appears to be a mistake in data entry needs to be fixed by actually borrowing additional money, as opposed to issuing a correction. If you have the amount of money you're supposed to have, why is it so dire that you published a typo?

[JackFr]

We had $X billion dollars in bonds we needed to finance, that day. The traders thought they had to finance $X-1 billion dollars.

We had good collateral to borrow the the money, but it was the money we needed.

The legal-books-and-records system gave us the right starting number. The transferring it to the trading-book-dashboard was a manual process. So they traded all day based on the wrong number. No one noticed until operations called the desk with about a half hour left in the trading day to say “Do you guys realize you’re short a billion?” Ten minutes to figure out what went wrong. The clerk who keyed in the wrong number didn’t get dinged that badly, cause 8-9 people saw both numbers and no one else noticed.