The Fed Audit - Bernie Sanders

[Maine-ah]

http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

(snip)

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.
The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.


In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.

GAO report:

http://sanders.senate.gov/imo/media/doc/GAO%20Fed%20Investigation.pdf

[woo me with science]

1. K&R

Follow the money.

[TexDevilDog]

2. I thought the FED was a private corporation not a governent agency

That would mean, they can do what they want.

[freshwest]

4. Created about a hundred years ago. Legal. With regulations gone, they do as they please.

[Selatius]

7. Yes and no.

The Board of Governors at the Fed is chosen by the president with the consent of Congress, and members serve staggered terms so no one president can stack the Board, but the regional branches are operated by the banks in those regions. It is a gray area for good reason. Nobody wants a contest between the Constitution and private banking interests over who exactly holds the power to create money.

[freshwest]

3. Thanks for bringing this here!

[banned from Kos]

5. The Fed, by law, must loan to any US chartered bank - even forergn owned.

Deutsche Bank USA is a US bank - period. Its holding company is German of course but the US branch serves US depositors.

Too many Democrats are going the Ron Paul route - and the guy is always wrong on the Fed.

[Maine-ah]

6. kick for the morning crew....

[snot]

8. This was what the bailout law was DESIGNED to do, as some DU'er's warned when the law was proposed:

See, e.g., http://c-cyte.blogspot.com/2008/10/few-key-concerns-re-bailout-bill.html and sources cited therein.

[xchrom]

9. Recommend