Bloomberg Releases Secret Information Regarding The Extent Of The Fed Bailout

This aaricle by Bloomberg (via Manan Shukla) provides information about financial support provided by the Fed to US banks during the financial crisis. This information was kept secret from Congress, the public and even from some Fed bank presidents. If the eurozone had a central bank that operated like the Fed there would be no financial crisis in Europe. The Fed provided loans and guarantees to the banks that amounted to $7 trillion.

There are lots of issues about how this was done and kept secret. Congress would have acted differently if it had all of the facts when it was writing bills that affected the banking system. Investors who purchased stock in the banks without this information have seen their investments drop substantially in value as problems in the banks became more visible due to poor performance. Its pretty clear that we would not have let the larger banks become even larger if Congress had been provided accurate information about the banks. I doubt that the Fed will be empowered to save the too big to fail banks in the next crisis. They are too big to save.