An FOIA filed by Bloomberg LC reveals that during the high point of the financial crisis, the U.S. Federal Reserve was handing out "discount window" loans by the billions.
These went not only to big U.S. banks, but to The Bank of China, Arab Banking Corp.(29% owned by Libya), among others. Rather than using the money to maintain liquidity, many were using it for currency speculation.
The Fed says all loans were authorized and legal under a 1980 law authorizing loans to any foreign bank with an office in the U.S.
The main rub is that the Fed at first wouldn't release information on the loans because Bernanke said it "might be embarrasing to the banks."
Does the U.S. Fed need to be reined in or is it effective in maintaining financial stability?
http://www.bloomberg.com/news/2011-04-0 … ecret.html
How about Libya.
http://news.antiwar.com/2011/03/31/fed- … wned-bank/
I'm not sure if things like this are normal in the world financial community, but even if so, why the secrecy by the Fed? Some analysts say this exposed the Fed to risk, if that's true then it should be investigated further.
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