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Reply #33: Secret Fed Loans Gave Banks Undisclosed $13B [View All]

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Nov-28-11 08:14 AM
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33. Secret Fed Loans Gave Banks Undisclosed $13B
http://www.bloomberg.com/news/2011-11-28/secret-fed-loa...

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret...The Fed didnt tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didnt mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Feds below-market rates, Bloomberg Markets magazine reports in its January issue.

Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

Change Their Votes

When you see the dollars the banks got, its hard to make the case these were successful institutions, says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.

NEAT INTERACTIVE GRAPHIC AT LINK SHOWS WHO GOT HOW MUCH
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