Fed Gave Banks Crisis Gains on Secretive Loans as Low as 0.01%

[kpete]

Source: Business Week

By Bob Ivry
May 26 (Bloomberg) -- Credit Suisse Group AG, Goldman Sachs Group Inc. and Royal Bank of Scotland Group Plc each borrowed at least $30 billion in 2008 from a Federal Reserve emergency lending program whose details weren’t revealed to shareholders, members of Congress or the public.

The $80 billion initiative, called single-tranche open- market operations, or ST OMO, made 28-day loans from March through December 2008, a period in which confidence in global credit markets collapsed after the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc.

Units of 20 banks were required to bid at auctions for the cash. They paid interest rates as low as 0.01 percent that December, when the Fed’s main lending facility charged 0.5 percent.

“This was a pure subsidy,” said Robert A. Eisenbeis, former head of research at the Federal Reserve Bank of Atlanta and now chief monetary economist at Sarasota, Florida-based Cumberland Advisors Inc. “The Fed hasn’t been forthcoming with disclosures overall. Why should this be any different?”

Read more: http://www.businessweek.com/news/2011-05-26/fed-gave-banks-crisis-gains-on-secretive-loans-as-low-as-0-01-.html

[ixion]

1. borrow at 0.01, loan out at 12%+

That's some criminal enterprise they've got going.

[w4rma]

2. How do I go directly to the Federal Reserve Bank to get a loan for 0.5%?

What are the requirements and where can I find information on the process I need to go through?

[defendandprotect]

3. Banks then bought Treasury notes paying 3.5% and 4% interest ....

that's why there was no lending out of money to consumers!!

[Po_d Mainiac]

4. And the squid lied about it to congress! n/t

[cstanleytech]

5. Am I misreading it

that the US government was loaning money to foreign banks to bail them out?

[cstanleytech]

6. Am I misreading it

that the US government was loaning money to foreign banks to bail them out?

[JackRiddler]

8. Of course not.

Keep in mind banksterism has many heads, but the tentacles are all entangled with one another. It's one beast.

[Octafish]

7. Crony Capitalism & Secret Government

The BFEE.