13 trillion in secret Fed loans
December 7, 2011
Posted by on
Bloomberg has worked for years to get access to the Fed data on LoLR loans during the crisis. They broke the news in this story on November 27 where they alleged that 13 trillion dollars had be given in loans and loan commitments without constitutional approval. The figure was later lowered to 7,7 trillion and has now become 1,7 trillion, as the Fed has written a sharp letter to Congress complaining about these wild and egregious stories.
Expect more reporting on this story as the week goes on, including the extent of dollar support for European banks (via the Fed’s dollar-euro swap lines).
The Congress has also dealt with these issues during a hearing in a subcommittee on banking in the Senate today. The topic was touched upon earlier (in 2009) in another hearing where Bernanke tries to explain who got the (then) half of trillion dollar. Relevant question is: Should there be any limits on how much loans the Fed should be able to extend during a crisis?