First FR Audit Reveals Trillions in Secret Bailout

and justice for all · 31-08-2011, 04:32 PM

First Federal Reserve Audit Reveals Trillions in Secret Bailouts - ipsnews.net

The first-ever audit of the U.S. Federal Reserve has revealed 16 trillion dollars in secret bank bailouts and has raised more questions about the quasi-private agency’s opaque operations.

"This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else," U.S. Senator Bernie Sanders, an Independent from Vermont, said in a statement.

The majority of loans were issues by the Federal Reserve Bank of New York (FRBNY).

"From late 2007 through mid-2010, Reserve Banks provided more than a trillion dollars… in emergency loans to the financial sector to address strains in credit markets and to avert failures of individual institutions believed to be a threat to the stability of the financial system," the audit report states [...]

The emergency loans included eight broad-based programmes, and also provided assistance for certain individual financial institutions. The Fed provided loans to JP Morgan Chase bank to acquire Bear Stears, a failed investment firm; provided loans to keep American International Group (AIG), a multinational insurance corporation, afloat; extended lending commitments to Bank of America and Citigroup; and purchased risky mortgage-backed securities to get them off private banks’ books.

Overall, the greatest borrowing was done by a small number of institutions. Over the three years, Citigroup borrowed a total of 2.5 trillion dollars, Morgan Stanley borrowed two trillion; Merryll Lynch, which was acquired by Bank of America, borrowed 1.9 trillion; and Bank of America borrowed 1.3 trillion.

Banks based in counties other than the U.S. also received money from the Fed, including Barclays of the United Kingdom, the Royal Bank of Scotland Group (UK), Deutsche Bank (Germany), UBS (Switzerland), Credit Suisse Group (Switzerland), Bank of Scotland (UK), BNP Paribas (France), Dexia (Belgium), Dresdner Bank (Germany), and Societe General (France) [...]

In recent days, ‘Bloomberg News’ obtained 29,346 pages of documentation from the Federal Reserve about some of these secret loans, after months of fighting in court for access to the records under the Freedom of Information Act.

Some of the financial institutions secretly receiving loans were meanwhile claiming in their public reports to have ample cash reserves, Bloomberg noted.

The Federal Reserve has neither explained how they legally justified several of the emergency loans, nor how they decided to provide assistance to certain firms but not others.

"The main problem is the lack of Congressional oversight, and the way the Fed seemed to pick winners who would be protected at any cost," Randall Wray, professor of economics at University of Missouri- Kansas City, told IPS [...]

The U.S. Government Accountability Office (GAO) audit itself was the result of at least two years of grassroots lobbying. IPS reported in June 2009 a wide bi-partisan coalition of Members of Congress had co-sponsored legislation to audit the Federal Reserve.

The audit was ordered as an amendment by Sanders as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act - a major banking overhaul passed by President Barack Obama and the U.S. Congress in 2010.

"I think this (the first ever GAO audit) was a good start to uncovering what the Fed did so that we can begin to determine whether similar actions should ever be permitted again," Wray wrote, adding, "my preliminary answer is a resounding no."

The GAO also found existing Federal Reserve policies do not prevent significant conflicts of interest. For example, "the FRBNY’s existing restrictions on its employees’ financial interests did not specifically prohibit investments in certain non-bank institutions that received emergency assistance," the report stated.

The GAO report noted on Sep. 19, 2008, William Dudley, who is now the President of the FRBNY, was granted a waiver to let him keep investments in AIG and General Electric, while at the same time the Federal Reserve granted bailout funds to the same two companies.

"No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed’s board of directors or be employed by the Fed," Sanders said.

The GAO is currently working on a more detailed report regarding Federal Reserve conflicts of interest, which is due on Oct. 18, 2011.

http://www.ipsnews.net/news.asp?idnews=104913

plam · 31-08-2011, 05:53 PM

When did that historic audit happen? First time I hear about it?

porridge · 31-08-2011, 07:00 PM

This is heavy duty!

Doubt your see this in the mainstream.

Slightly bigger bombshell than the pentagon trilllions

http://www.huntingtonnews.net/8676

and justice for all · 14-09-2011, 08:45 PM

(...from Forbes?)

-

We Need A True, Comprehensive Audit Of The Fed - forbes.com

[...] The Fed has been forced to open some of their books twice this year. Both times top Fed officials claimed that releasing their loan information to the public would cause “severe and irreparable competitive injury” to borrowing banks. That poor excuse sure did signal that the Fed has a lot to hide. The central bank is more powerful than Congress, yet has less accountability than even the Central Intelligence Agency (CIA). That kind of power and privacy is dangerous in the hands of an institution that has a complete monopoly over our money supply.

Bloomberg News first forced the Fed to release documents back in April. The financial news organization went through an arduous, three-year court battle to make some documents public through the Freedom of Information Act. The Fed, which repeatedly appealed court decisions and requested numerous delays, took its fight for secrecy all the way to the Supreme Court and lost.

Our suspicions proved true when the 28,000 pages of released documents revealed massive foreign bank bailouts [...]

The first ever audit of the Federal Reserve was conducted back in July. Due to a provision under the misguided Dodd-Frank financial overhaul law, the Government Accountability Office (GAO) conducted a one-time, watered-down audit of the central bank. It gave the American people their first peek into the central bank’s books, but prevented investigators from peering into their deliberations on interest rates and the most crucial transactions of the Fed [...]

The central bank just handed out colossal amounts of money to its Wall Street cronies without a single vote taking place in any chamber of Congress.

The watered-down audit conducted last month was a victory, but we still have a long way to go in the fight for Fed transparency. The documents that were released in April and July are further evidence that we need a true audit of the Fed. While these documents are disturbing enough, just imagine what kind of mischief we would find through a real audit. The Federal Reserve loaning trillions to foreign banks may just be the tip of the iceberg [...]

Fed Chairman Ben Bernanke is looking a little more nervous these days. He knows that the calls for a true audit of the central bank are getting louder and stronger. We will keep the pressure on until transparency and openness ultimately win.

http://www.forbes.com/sites/mattkibb...it-of-the-fed/

wake_up_bomb · 14-09-2011, 08:50 PM

Very interesting, even CBS is reporting on the issue:

http://www.cbsnews.com/8301-503544_1...73-503544.html

and justice for all · 14-09-2011, 09:04 PM

Quote:

Originally Posted by wake_up_bomb

Very interesting, even CBS is reporting on the issue:

http://www.cbsnews.com/8301-503544_1...73-503544.html

It’s been reported quite widely I understand, mostly web and print blurbs, but not so much on TV news networks as one would expect...

The first octogenarian to cross the channel swimming, the first woman to sail around the world, stuff like that they report, the first audit ever to the American Central Bank? Nah!

wake_up_bomb · 14-09-2011, 09:22 PM

Quote:

Originally Posted by and justice for all

It’s been reported quite widely I understand, mostly web and print blurbs, but not so much on TV news networks as one would expect...

The first octogenarian to cross the channel swimming, the first woman to sail around the world, stuff like that they report, the first audit ever to the American Central Bank? Nah!

Yes, the broadcast 'media' has a lot to answer for.

vagrant · 14-09-2011, 10:36 PM

who audits the Federal Reserve, and can they be trusted?

andyh · 14-09-2011, 10:44 PM

http://www.globalresearch.ca/index.p...t=va&aid=26276

So WTF?
Don't tell me this 16trillion is in addition to the 14trillion debt they have already?

http://www.portent.com/images/2011/0...d-facepalm.jpg

theabominablephenomenon · 15-09-2011, 12:53 AM

Quote:

Originally Posted by andyh

http://www.globalresearch.ca/index.p...t=va&aid=26276

So WTF?
Don't tell me this 16trillion is in addition to the 14trillion debt they have already?

http://www.portent.com/images/2011/0...d-facepalm.jpg

Oh dear!

andyh · 15-09-2011, 09:34 AM

lol, its feckin nuts.

31-08-2011, 04:32 PM	#1
and justice for all Senior Member Join Date: Apr 2008 Posts: 2,241	First FR Audit Reveals Trillions in Secret Bailout *First Federal Reserve Audit Reveals Trillions in Secret Bailouts* - ipsnews.net The *first-ever audit* of the U.S. Federal Reserve has revealed *16 trillion* dollars in secret bank bailouts and has *raised more questions about the quasi-private agency’s opaque operations. "This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else," U.S. Senator Bernie Sanders, an Independent from Vermont, said in a statement. The majority of loans were issues by the Federal Reserve Bank of New York (FRBNY). "From late 2007 through mid-2010, Reserve Banks provided more than a trillion dollars… in emergency loans to the financial sector* to address strains in credit markets and to avert failures of individual institutions believed to be a threat to the stability of the financial system," the audit report states [...] The emergency loans included eight broad-based programmes, and also provided assistance for certain individual financial institutions. *The Fed provided loans to JP Morgan Chase bank to acquire Bear Stears, a failed investment firm; provided loans to keep American International Group (AIG), a multinational insurance corporation, afloat; extended lending commitments to Bank of America and Citigroup; and purchased risky mortgage-backed securities to get them off private banks’ books. Overall, the greatest borrowing was done by a small number of institutions. Over the three years, Citigroup borrowed a total of 2.5 trillion dollars, Morgan Stanley borrowed two trillion; Merryll Lynch, which was acquired by Bank of America, borrowed 1.9 trillion; and Bank of America borrowed 1.3 trillion. Banks based in counties other than the U.S. also received money from the Fed, including Barclays of the United Kingdom, the Royal Bank of Scotland Group* (UK), *Deutsche Bank* (Germany), *UBS* (Switzerland), *Credit Suisse Group* (Switzerland), *Bank of Scotland* (UK), *BNP Paribas* (France), *Dexia* (Belgium), *Dresdner Bank* (Germany), and *Societe General* (France) [...] In recent days, ‘Bloomberg News’ obtained 29,346 pages of documentation from the Federal Reserve about some of these secret loans, after months of fighting in court for access to the records under the Freedom of Information Act. Some of the financial institutions secretly receiving loans were meanwhile claiming in their public reports to have ample cash reserves, Bloomberg noted. The Federal Reserve has neither explained how they legally justified several of the emergency loans, nor how they decided to provide assistance to certain firms but not others. "The main problem is the lack of Congressional oversight, and the way the Fed seemed to pick winners who would be protected at any cost," Randall Wray, professor of economics at University of Missouri- Kansas City, told IPS [...] *The U.S. Government Accountability Office (GAO) audit itself was the result of at least two years of grassroots lobbying. IPS reported in June 2009 a wide bi-partisan coalition of Members of Congress had co-sponsored legislation to audit the Federal Reserve. The audit was ordered as an amendment by Sanders as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act - a major banking overhaul passed by President Barack Obama and the U.S. Congress in 2010. "I think this (the first ever GAO audit) was a good start to uncovering what the Fed did so that we can begin to determine whether similar actions should ever be permitted again," Wray wrote, adding, "my preliminary answer is a resounding no." The GAO also found existing Federal Reserve policies do not prevent significant conflicts of interest. For example, "the FRBNY’s existing restrictions on its employees’ financial interests did not specifically prohibit investments in certain non-bank institutions that received emergency assistance," the report stated. The GAO report noted on Sep. 19, 2008, William Dudley, who is now the President of the FRBNY, was granted a waiver to let him keep investments in AIG and General Electric, while at the same time the Federal Reserve granted bailout funds to the same two companies. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed’s board of directors or be employed by the Fed," Sanders said. The GAO is currently working on a more detailed report regarding Federal Reserve conflicts of interest, which is due on Oct. 18, 2011. http://www.ipsnews.net/news.asp?idnews=104913 __________________ - Michael Parenti: Justice for Sale (mp3)* . I'm not your daddy or mummy, don't ask me for links.

31-08-2011, 07:00 PM	#3
porridge Senior Member Join Date: Apr 2010 Location: the cemetery Posts: 6,453	great post This is heavy duty! Doubt your see this in the mainstream. Slightly bigger bombshell than the pentagon trilllions http://www.huntingtonnews.net/8676

14-09-2011, 08:45 PM	#4
and justice for all Senior Member Join Date: Apr 2008 Posts: 2,241	Update (...from Forbes?) - We Need A True, Comprehensive Audit Of The Fed - forbes.com [...] The Fed has been forced to open some of their books twice this year. Both times top Fed officials claimed that releasing their loan information to the public would cause *“severe and irreparable competitive injury”* to borrowing banks. That poor excuse sure did signal that the Fed has a lot to hide. The central bank is more powerful than Congress, yet has less accountability than even the Central Intelligence Agency (CIA). That kind of power and privacy is dangerous in the hands of an institution that has a complete monopoly over our money supply. *Bloomberg News* first forced the Fed to release documents back in April. The financial news organization went through an arduous, three-year court battle to make some documents public through the *Freedom of Information Act. The Fed, which repeatedly appealed court decisions and requested numerous delays, took its fight for secrecy all the way to the Supreme Court and lost. Our suspicions proved true when the 28,000 pages of released documents revealed massive foreign bank bailouts [...] The first ever audit of the Federal Reserve was conducted back in July. Due to a provision under the misguided Dodd-Frank financial overhaul law, the Government Accountability Office (GAO) conducted a one-time, watered-down audit of the central bank. It gave the American people their first peek into the central bank’s books, but prevented investigators from peering into their deliberations on interest rates and the most crucial transactions of the Fed [...] The central bank just handed out colossal amounts of money to its Wall Street cronies without a single vote taking place in any chamber of Congress. The watered-down audit conducted last month was a victory, but we still have a long way to go in the fight for Fed transparency. The documents that were released in April and July are further evidence that we need a true audit of the Fed. While these documents are disturbing enough, just imagine what kind of mischief we would find through a real audit. The Federal Reserve loaning trillions to foreign banks may just be the tip of the iceberg [...] Fed Chairman Ben Bernanke is looking a little more nervous these days. He knows that the calls for a true audit of the central bank are getting louder and stronger. We will keep the pressure on until transparency and openness ultimately win. http://www.forbes.com/sites/mattkibb...it-of-the-fed/ __________________ - Michael Parenti: Justice for Sale (mp3)* . I'm not your daddy or mummy, don't ask me for links.

14-09-2011, 10:36 PM	#8
vagrant Senior Member Join Date: Aug 2011 Posts: 1,829	who audits the Federal Reserve, and can they be trusted? Last edited by vagrant; 14-09-2011 at 10:37 PM.

31-08-2011, 05:53 PM	#2
plam Temporarily suspended Join Date: Apr 2011 Posts: 4,271	When did that historic audit happen? First time I hear about it?

14-09-2011, 08:50 PM	#5
wake_up_bomb Senior Member Join Date: Jun 2009 Posts: 6,985	Very interesting, even CBS is reporting on the issue: http://www.cbsnews.com/8301-503544_1...73-503544.html

14-09-2011, 10:44 PM	#9
andyh Banned Join Date: Oct 2008 Location: West Cork, Ireland Posts: 18,048	http://www.globalresearch.ca/index.p...t=va&aid=26276 So WTF? Don't tell me this 16trillion is in addition to the 14trillion debt they have already? http://www.portent.com/images/2011/0...d-facepalm.jpg

15-09-2011, 09:34 AM	#11
andyh Banned Join Date: Oct 2008 Location: West Cork, Ireland Posts: 18,048	lol, its feckin nuts.