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Secret Bailout Loans Made Banks Billions Of Dollars
By
Christopher Robbins
Published Nov 28, 2011
Modified Nov 28, 2011
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By
Christopher Robbins
Published Nov 28, 2011
Modified Nov 28, 2011
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Remember when we taxpayers just had to bail out all those financial institutions because they were in terrible financial shape and "too big to fail?" If we fronted them a little money now, we were told, these normally successful banks would keep on humming. But through FOIA requests, Bloomberg News reveals that the bailout was much larger than initially believed—$7.7 trillion by September of 2009, and banks made an estimated $13 billion of the generous terms of the loans.
The revelations come after Bloomberg LP won a lawsuit against the Fed and a group of the largest banks in the United States, the Clearing House Association LLC, for access to records of more than 21,000 transactions that took place between 2007 and 2009. The story notes:
While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.
Democratic Senator Sherrod Brown tells the outlet, "When you see the dollars the banks got, it’s hard to make the case these were successful institutions." He continues, “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”
We advise reading the entire story with a stiff drink in hand.
Tagged
bailout
banks
federal reserve
financial crisis
occupy wall street
too big to fail
wall street
Christopher Robbins
Christopher Robbins is a New York City reporter covering transportation, affordable housing, local politics, and criminal justice. His work has also appeared in New York Magazine, The Village Voice and The New York Times. Chris is a graduate of Patrick Henry High School in Roanoke, Virginia, and enjoys biking to Fort Tilden in the summertime.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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