Sanders: Fed lending 'jaw-dropping'

Dec. 2, 2010 at 10:03 AM   |   0 comments

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WASHINGTON, Dec. 2 (UPI) -- Sen. Bernard Sanders, Ind-Vt., said the U.S. Federal Reserve's lending programs during the height of the financial meltdown require an "extensive" examination.

"The American people are finally learning the incredible and jaw-dropping details of the Fed's multitrillion-dollar bailout of Wall Street and corporate America," Sanders said, The Washington Post reported Thursday.

"Perhaps the most surprising is the huge sum that went to bail out foreign private banks and corporations. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions."

The Fed revealed this week it loaned $3.3 trillion to corporations such as General Electric and Verizon and to foreign concerns, including the Korean Development Bank, during the fall of 2008 and the summer of 2009.

Dallas Federal Reserve President Richard Fisher said: "That's what we are paid to do. We took an enormous amount of risk with the people's money … and we didn't lose a dime, and in fact we made money on every one of them," referring to the numerous lending facilities the Fed initiated during that time.

The "jaw-dropping" numbers include a $407 million loan to the KDB in one day and $18.6 billion loaned to Citigroup in one day in November 2008.

Sanders said the loans "had very little positive impact on the needs of ordinary Americans," but businesses and banks that took part in the programs praised the Fed.

"The Federal Reserve took essential steps to fix these markets and its actions were very successful," Goldman Sachs said in a statement.

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