"We were responding to a national emergency at that point," Nelson said. "Had we implemented the program with less attractive terms, we would have risked falling short in our effort to stop the run on money-market mutual funds and seeing a far worse financial crisis."

'Appropriate Return'

Nelson said the central bank earned "an appropriate return on all the loans." The AMLF program, which charged the central bank's discount rate on loans, produced $543 million in interest income, according to the Fed's inspector general. The rate varied from 2.25 percent when the program began to as low as 0.5 percent by January 2009. The last AMLF loan, given in May 2009, matured in August 2009.

State Street worked closely with the Fed in setting up the program, Carolyn Cichon, a company spokeswoman, said in an e- mail. The bank was among AMLF's first participants "for our clients wishing to utilize the facility," she said.

State Street is the third-largest U.S. custody bank. It keeps records, tracks performance and provides other support services for institutional investors that include money-market funds. Its participation in AMLF explains why it ranked fifth on Bloomberg's list of biggest borrowers from multiple Fed programs, with a peak of $77.8 billion on Oct. 1, 2008. First was New York-based Morgan Stanley with peak borrowings of $107.3 billion. It was followed by Citigroup Inc. at $99.5 billion and Bank of America Corp. at $91.4 billion.

Tapped Other Programs

While AMLF funds accounted for most of State Street's Fed borrowings during the financial crisis, the bank also tapped other emergency programs for liquidity. Its loans from the Term Auction Facility and the Commercial Paper Funding Facility peaked at a combined $18.5 billion on March 31, 2009, after the firm's excess liquidity plunged by 44 percent in the first three months of that year.

State Street was hurt during the crisis both by losses on its own investments and on investments made for clients. The firm wrote down the value of its bond portfolio by $3.7 billion in May 2009. It also paid out at least $830 million in penalties to regulators and compensation to clients who lost money in funds that invested in mortgage-backed securities.

Reduced Dividend

State Street slashed its quarterly dividend in February 2008 to 1 cent a share from 24 cents. It remained at 1 cent until rising to 18 cents in March 2011.

JPMorgan is the second-largest custody bank behind Bank of New York Mellon Corp. Howard Opinsky, a spokesman for JPMorgan, declined to comment. Its borrowings from AMLF peaked at $61.9 billion on Oct. 2, 2008, according to Fed data. The bank's overall borrowings from seven Fed programs peaked at $68.6 billion, ranking it eighth on Bloomberg's list of top borrowers.

While BNY Mellon, Bank of America, Citigroup, SunTrust Banks Inc. and Credit Suisse Group AG also participated in the AMLF program, JPMorgan and State Street handled 92 percent of the debt purchases the program financed.

David Skidmore, a Fed spokesman, said no banks that wished to participate in AMLF as intermediaries were turned away.