---------- Forwarded message ----------
From: Scotty Starnes's Blog <[email protected]>
Date: Tue, Dec 28, 2010 at 12:01 PM
Subject: [New post] Half of Federal Reserve's emergency credit facility cash
went to foreign banks
To: [email protected]
<http://scottystarnes.wordpress.com/author/scottystarnes/> Half of
Federal Reserve's emergency credit facility cash went to foreign
banks<http://scottystarnes.wordpress.com/2010/12/28/half-of-federal-reserves-emergency-credit-facility-cash-went-to-foreign-banks/>
*Scotty Starnes
<http://scottystarnes.wordpress.com/author/scottystarnes/>*| December
28, 2010 at 1:00 PM | Tags: audit
The Federal
Reserve<http://scottystarnes.wordpress.com/?tag=audit-the-federal-reserve>,
Ben Bernanke <http://scottystarnes.wordpress.com/?tag=ben-bernanke>, emergency
credit
facility<http://scottystarnes.wordpress.com/?tag=emergency-credit-facility>,
Federal Reserve
<http://scottystarnes.wordpress.com/?tag=federal-reserve>, foreign
banks <http://scottystarnes.wordpress.com/?tag=foreign-banks>, Term Auction
Facility <http://scottystarnes.wordpress.com/?tag=term-auction-facility>, US
Federal Reserve
<http://scottystarnes.wordpress.com/?tag=us-federal-reserve>|
Categories:
Uncategorized<http://scottystarnes.wordpress.com/?category_name=uncategorized>|
URL:
http://wp.me/pvnFC-3Ul
Good news taxpayers. We paid to keep foreign banks in operation as folks
here in the US suffer from bankruptcies, foreclosures and poverty. This is
why the taxpayers must demand a yearly audit of The Federal Reserve.
FT.com<http://www.ft.com/cms/s/0/69728262-11ec-11e0-92d0-00144feabdc0.html#axzz19Pc93l7L>
reports:
Some of the world’s strongest banks have profited from an emergency credit
facility set up by the US Federal Reserve
<http://www.ft.com/cms/s/0/8b01a37c-0896-11e0-b981-00144feabdc0,dwp_uuid=4034778a-37aa-11dd-aabb-0000779fd2ac.html#axzz19LRECGab>to
shore up confidence in the global financial system, according to a Financial
Times analysis of data released by the Fed.
*More than half of lending under the Fed’s term auction facility – the
largest of its crisis programmes – went to foreign
banks<http://www.ft.com/cms/s/0/4dd95e42-fd6d-11df-a049-00144feab49a.html#axzz19LRXTiNh>.
*Details of the varied uses to which they put it may add to political
criticism of the Fed.
The Taf was set up in December 2007 to provide one-month loans to
creditworthy banks as markets dried up for lending longer than overnight. In
August 2008, it began offering three-month loans as well.
Rabobank of the Netherlands and
*Toronto-Dominion<http://markets.ft.com/tearsheets/performance.asp?s=ca:TD>
* of Canada, two of the only banks in the world with triple A credit
ratings, used more than $20bn in cumulative Taf loans.
Ed Clark, TD chief executive, said that using Taf was logical even though
his bank never had a liquidity problem. “That wasn’t how we made a lot of
money. But you make a dollar here, you make a dollar there. What’s the
spread you make on a billion dollars?” he said.
In the summer of 2008, TD was borrowing $1bn from TAF at rates of between 2
and 2.5 per cent. For that borrowing it used the lowest quality – and hence
highest yielding – collateral acceptable to the Fed.
More than 80 per cent of its collateral had a triple B credit rating at a
time when such bonds yielded about 7 per cent. TD could therefore have made
a notional gross spread of about $4m a month during 2008.
Mr Clark said the authorities were encouraging healthy banks to use schemes
such as the Taf so as not to stigmatise their weaker counterparts. In
January 2008, Ben Bernanke, the Fed chairman, said the Taf appeared to be
succeeding because “there appears to have been little if any stigma”.
“You go through the whole crisis and there were lots of things we did that
weren’t necessarily economic but were the right thing to do for the system,”
said Mr Clark. “So I’m not embarrassed by this at all.”
Continue
reading>>><http://www.ft.com/cms/s/0/69728262-11ec-11e0-92d0-00144feabdc0.html#axzz19Pc93l7L>
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