Tuesday, November 29, 2011

Fed secrets in US banks bailout exposed

Source: Press TV

Anti-Wall Street demonstrators shout slogans in front of the Federal Reserve Bank following a march through downtown Los Angels on November 22, 2011.

The details of the largest bailout in American history by Federal Reserve, which paid out multitrillion dollars to major US banks, have finally been exposed after two years of secrecy.

According to the bailout details, some of major US Banks took tens of billions of dollars in emergency loans from Federal Reserve in secret while assuring investors their firms were healthy, Bloomberg Markets magazine reported on Monday.

The new report of the financial crisis of 2007 to 2009 emerged from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions.

The newly emerged data shows that US banks reaped an estimated USD 13 billion of income by taking advantage of the Fed's below-market rates.

Fed officials say that almost all of the loans were repaid and there have been no losses, however, the secrecy surrounding the funding "enabled the biggest banks to grow even bigger."

Federal Reserve never unveiled the details of the bailout to US congress even as lawmakers paid out more money and debated new rules to save the banks who lobbied against government regulations.

The money paid out to JPMorgan, Bank of America, Citigroup Inc. (C), Wells Fargo & Co. (WFC), Goldman Sachs Group Inc. (GS) and Morgan Stanley, accounted for 63 percent of the total average daily debt to the Fed.

The latest report comes as the US jobless rate has stuck above 8.8 percent since March 2009 and police have clashed with Occupy Wall Street protesters, who are against government policies which favors the wealthiest citizens.

The Occupy movement emerged after a group of demonstrators gathered in New York's financial district on September 17 to protest the unjust distribution of wealth in the country and the excessive influence of big corporations on US policies.

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