the plan for the future
28 November 2011
Author: Eyder Peralta
Taken from: NPR - Report: Fed Committed $7.77 Trillion To Rescue Banks
Bloomberg ran quite a story, yesterday. It stems from a Freedom of Information Act Request that yielded the details of previously secret borrowing from the federal government to the biggest banks.
The bottom line, reports Bloomberg, by March of 2009, the Fed had committed $7.77 trillion "to rescuing the financial system, more than half the value of everything produced in the U.S. that year." The lending began in August of 2007.
The reporting from Bloomberg Markets Magazine is spectacular, so we hope you click over and give the exhaustive piece a read. But here are a few paragraphs that tell you what all of this means:
Update at 1:51 p.m. ET. Congressman Calls For Hearing:
Rep. Elijah E. Cummings, a ranking member of the House Committee on Oversight and Government Reform, called on Chairman Rep. Darell Issa to hold a hearing about the loans.
In the letter, Cummings, a Democrat from Maryland, says that according to the Bloomberg report Congress was kept in the dark about the loans even while they debated new regulations on Wall Street. Cummings wants that investigated as well as why banks were able to keep the details of the loans from their shareholders.
"Many Americans are struggling to understand why banks deserve such preferential treatment while millions of homeowners are being denied assistance and are at increasing risk of foreclosure," wrote Cummings. "Unfortunately, officials from many of these financial institutions declined to comment about these loans, including officials from Goldman Sachs, JPMorgan, Bank of America, Citigroup, and Morgan Stanley."