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Fed discloses details of its crisis lending

December 1, 2010 | 10:33 am

The Federal Reserve Board has pulled back the curtain on the companies that took advantage of its short-term loans and other emergency programs that it set up during the financial crisis.

The Fed on Wednesday posted on a public website details of 21,000 transactions from December 2007 through this July 2010 that totaled more than $2 trillion. The help was provided to banks and other key companies, often to provide them with liquidity -- that is to keep them from running out of cash -- when the private credit markets froze up.

The data can be downloaded at this website in Excel spreadsheet form allowing users to sort and filter the data in multiple categories, the Fed said.

The disclosures were required by the financial overhaul law that Congress passed this year.

The law also required Congress' Government Accountability Office to analyze the data and report on the Fed's actions during the crisis, which critics such as Sen. Bernard Sanders (I-Vt.) have called too secretive. The GAO report won't be issued for months, Sanders aides said.

The aides said Sanders, who sponsored the amendment requiring disclosure of the transactions, will go through it carefully to look for potential conflicts of interest on the part of bankers who also served on various Fed boards.

Another topic for scrutiny will be whether big banks repaid bailout funds from the U.S. Treasury, thus escaping Treasury-imposed limits on executive compensation, and then borrowed funds cheaply from the Fed, which did not impose pay restrictions on financial firms it was assisting through the crisis.

The Fed said the loans and other transactions it made were fully secured and mostly short-term. It said that as the financial crisis has eased, the need for the programs has dissipated, and most programs were shut down earlier this year. The central bank said it had suffered no credit losses on the programs that have been wound down, and expects none on the few remaining programs.

-- E. Scott Reckard

 

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