U.S. Federal Reserve Board secretly handed out trillions of dollars in virtually free loans to major American & European banks at the height of the financial crisis between 2007 and 2010, according to an article posted by Bloomberg News. The investigation says the loans received by Wall Street Aristocracy amounted to $1.2 trillion in loans from the federal government. This has been under both the Bush and Obama presidential administrations. The Bloomberg article points out, for example, that the $1.2 trillion peak in emergency federal loans reached on December 8, 2008. This roughly equals the $1.27 trillion in unpaid principal on 4.38 million US homes whose owners are delinquent on their mortgage payments and the 2.16 million properties that are already in foreclosure.
Even with the Freedom of Information Act, which the federals denied, the toothless law requires only that the Fed disclose the identity of its borrowers and the amounts borrowed 2 years after the event.
Citigroup Inc. (C) and Bank of America Corp’ (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion in profits. It wasn’t Just American finance. Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms. This Includes the Edinburgh-based Royal Bank of Scotland Plc, which took $84.5 billion, the most of any non-U.S. Lender.
Title: Wall Street Aristocracy Got $1.2 Trillion in Secret Loans
Sources: Bloomberg.com, August 22, 2011 , and Wsws.org, August 23, 20011
Authors: Bradley Keoun and Phil Kuntz Bloomberg & Barry Grey World Socialist Web Site
Faculty Evaluator: Forrest A. Deseran, , Sonoma State University
Student Researcher:Ron Tureck, Sonoma State University Student
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