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Bloomberg News has come out with banking numbers today (Dec. 2) that raise disquieting questions about the U.S. Federal Reserve's role in the world. The central question: is the U.S. the banker to the world? Bloomberg quotes Federal Reserve data from the financial crisis showing that Swiss-based UBS and UK-based Barclays are among the top users of a $3.3 trillion Fed emergency banking program. UBS was the biggest borrower under the commercial paper funding facility, with $74.5 billion, more than twice as much as Citigroup, which is controlled by the U.S. Barclays took the largest amount of overnight loans when it got $47.9 billion on Sept. 18, 2008. Sen. Bernard Sanders, Vermont independent who wrote the provision into the Dodd-Frank Act requiring these Fed disclosures, asks, "Has the Federal Reserve become the central bank of the world?" Remember, the trillions of dollars the Fed has been printing to bail out the world's banks eventually comes out of the pockets of Americans.

Among American banks, Wells Fargo and Bank of America each got $45 billion from the term auction facility. And do you remember all those claims by Goldman Sachs that it didn't have to take federal money? They were b.s. Goldman borrowed more than $24 billion from a Fed program, according to Bloomberg.

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Comments

MURPHYJUNK Dec. 2, 2010 @ 9 a.m.

I doubt it is an untended consequence

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Don Bauder Dec. 2, 2010 @ 11:39 a.m.

Many economists feel it was necessary for world stability for the U.S. to make loans to foreign financial institutions. Best, Don Bauder

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a2zresource Dec. 2, 2010 @ 9:08 a.m.

As more facts are revealed, the financial sector is less and less of a black box with unknown functionality and unknown relationships. What is revealed has interesting complexity issues relating to the national-significance complexity of insurance and re-insurance that meant AIG was a too-big-to-fail institution.

There is an amazing record here of... interconnected stuff.

As for Goldman Sachs, maybe what they meant to say at the time was that they hadn't received any federal funds that WE had any means of knowing about... I imagine that we can hear the high-level behind-the-scene rationalization now: "Our institutional financial health and how we maintain it is a trade secret!"

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Don Bauder Dec. 2, 2010 @ 11:46 a.m.

My guess is that Goldman Sachs never thought that Dodd-Frank would require the release of the information. It's my understanding that Goldman drew down billions of dollars in something like 141 different transactions. It appears that during this period, it was insisting that it didn't need any federal help. If the big Wall Street investment banks didn't need a federal bailout, why did they become chartered banks, giving up their titles as investment banks? You know why. Becoming banks gave them access to the Fed's loan window. Why did the U.S. give money to AIG, which then passed it to Goldman Sachs? Isn't it time the public heard the truth about all this? Best, Don Bauder

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SurfPuppy619 Dec. 2, 2010 @ 1:04 p.m.

Why did the U.S. give money to AIG, which then passed it to Goldman Sachs? Isn't it time the public heard the truth about all this

Goldman would have went BK w/o the AIG bailout-and payout of 100 cents on the dollar.

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Don Bauder Dec. 2, 2010 @ 9:23 p.m.

I have always thought Goldman was on the brink -- hence, the utterly disgraceful AIG bailout that brought Goldman 100 cents on the dollar when it deserved no more than 20 cents. Bernanke, Geithner, Paulson all know the truth. They will never tell. Best, Don Bauder

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