Report: Bailed-out banks earned $13 billion on interest alone
The Federal Reserve kept Congress in the dark about billions in profits generated by big Wall Street firms that used taxpayer dollars to take advantage of below-market interest rates, Bloomberg Markets reported this week.
Firms took advantage of the below-market interest rates offered by the Fed amid President George W. Bush’s bailout program, secretly leveraging $13 billion off taxpayer money, they found.
The report also notes that the Fed did not reveal to Congress which institutions were involved in the loan program, and whether they were even stable enough to receive them.
“We were aware emergency efforts were going on,” said Rep. Barney Frank (D-MA), who chaired the House Financial Services Committee at the time. “We didn’t know the specifics.”
The Fed gave out over $7.7 trillion to banks all over the world by March 2009, Bloomberg found, well surpassing the stated $700 billion being attributed to the Treasury Department’s Troubled Asset Relief Program.
Bloomberg’s latest report was made possible by a court case against Clearing House Association, LLC., a group representing the nation’s largest banks. The Fed also fought against disclosing details of its unprecedented loan program, and it took an act of Congress to achieve a first-ever audit of the bank’s books.