A report from Bloomberg Markets Magazine reveals details about the infamous super secret emergency loans that the United States Federal reserve administered to rescue the nations largest banks.
The total money committed after adding up the guarantees and loans amounts to $7.77 Trillion Dollars, which if distributed among the American citizens would amount to $30,000 dollars for every man, woman and child in the country, the financial report from March 2009 said.
While the number might still seem to be huge, the Fed actually did this to keep the banking system afloat during the financial crisis. It’s nice of them to think so much about the banks rather than the citizens of the Country.
As pointed out by Felix Salmon at Reuters:
“On September 16, 2008,Morgan Stanleyowed $21.5 billion to the Fed. The next day, that number doubled, to $40.5 billion. And eight working days later, on the 29th, the bank’s total borrowings from the Fed reached $107 billion. The Fed didn’t blink: it kept on lending, as much as it could, to any bank which needed the money, because, in a crisis, that’s its job.”
It’s quite interesting to know that the information was disclosed so late and it seems fair isn’t it? No investigation agency has any jurisdiction to interfere in the matters of Federal Reserve neither does the government.
The new Financial regulations would have been better if this report were disclosed earlier.
Because the lawmakers were kept in dark and Federal reserve can do that because of the Federal Reserve Act of 1913, they had no access to information about the lending of Secret loans to the National Banks, Otherwise the Dodd-Frank Wallstreet Reform and Consumer Protection Act would be better than what it is.
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