Feds gave $1.2 trillion in secret loan to banks

Source: Press TV
http://www.presstv.ir/usdetail/195207.html

The Federal Reserve gave $1.2 trillion in secret loans to banks during the financial crisis, from August 2007 until April 2010. This is in addition to the TARP bailouts which were publicly known. Economicpopulist.org

The $1.2 trillion peak on Dec. 5, 2008 was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg. Economicpopulist.org

HIGHLIGHTS

The largest borrower was Morgan Stanley, which received as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion. Politico

By comparison, TARP, a $700 billion bank bailout fund that was passed by Congress in late 2008, gave $45 billion each to Citigroup and Bank of America, and only $10 billion to Morgan Stanley. Politico

The Fed also lent heavily to foreign banks that were struggling to fund themselves: Almost half of the Fed's top 30 borrowers, measured by peak balances, were European firms. They included Royal Bank of Scotland, Switzerland's UBS and Belgium's Dexia. Latimesblogs.latimes

A former Justice Department official, Robert Litan who has in the past served on a commission looking at the causes of the Savings and Loan crisis, is quoted by Bloomberg as saying 'These are all whopping numbers. You're talking about the aristocracy of American finance going down the tubes without the federal money.' Economicvoice

FACTS & FIGURES

The money was loaned by the Fed in an attempt to grow the U.S. economy after the crash of 2008. According to Bloomberg research, the $1.2 trillion amounts to more money than all federally insured banks earned in the last decade. Shortnews.com

The Federal Reserve claims that it has not lost money on these emergency loans, and that in fact it has netted $13 billion in interest from these programs from August 2007 through December 2009. Politico

The Fed, under Chairman Ben S. Bernanke, initially refused to disclose which banks had sought financial help during the crisis, asserting that publishing the information could trigger a run on the institutions by branding them as troubled. Latimesblogs.latimes

Bloomberg had filed a Freedom of Information act in 2008 to find out the details on these loans. They finally won to be presented with 21,000 transactions and massive amounts of data to crunch. economicpopulist.org