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Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak

Posted By admin On April 1, 2011 @ 5:25 am In Money Watch | Comments Disabled

Bradley Keoun and Craig Torres
Bloomberg [1]
April 1, 2011

U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.

Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s “discount window” lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion.

The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record. The disclosures may stoke a reexamination of the risks posed to U.S. taxpayers by the central bank’s role in global financial markets.

“The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners, and that is not conducive to its long-run reputation,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007.

Full article here [1]

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URLs in this post:

[1] Bloomberg: http://www.bloomberg.com/news/2011-04-01/foreign-banks-tapped-fed-s-lifeline-most-as-bernanke-kept-borrowers-secret.html

[2] Stock up with Fresh Food that lasts with eFoodsDirect (AD): http://www.efoodsdirect.com/

[3] Image: http://purewaterfreedom.com/

[4] The Fed Releases Thousands Of Secret Bailout Docs In The Least Transparent Way Possible: http://www.prisonplanet.com/fed-reveals-which-banks-borrowed-during-crisis.html

[5] Fed Data Shows Foreign Banks Huge Beneficiaries of Emergency Lending Programs, Hedge Funds, McDonald’s, Harley-Davidson and Others Also Bailed Out: http://www.prisonplanet.com/fed-data-shows-foreign-banks-huge-beneficiaries-of-emergency-lending-programs-hedge-funds-mcdonald%e2%80%99s-harley-davidson-and-others-also-bailed-out.html

[6] Trillions In Secret Fed Bailouts For Global Corporations And Foreign Banks: http://www.prisonplanet.com/trillions-in-secret-fed-bailouts-for-global-corporations-and-foreign-banks-%e2%80%93-has-the-federal-reserve-become-a-completely-unaccountable-global-bailout-machine.html

[7] Banks borrow record $437.5 billion per day from Fed: http://www.prisonplanet.com/banks-borrow-record-4375-billion-per-day-from-fed.html

[8] Americans Have Been Bailing Out Foreign Banks for Years … And We’re Getting Ready To Do It Again: http://www.prisonplanet.com/americans-have-been-bailing-out-foreign-banks-for-years-and-were-getting-ready-to-do-it-again.html

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