Fed Won't Say Where $2T in Loans Went

Money is in addition to $700B Wall St. bailout; collateral unclear, too
By Harry Kimball,  Newser Staff
Posted Nov 10, 2008 12:54 PM CST
Fed Won't Say Where $2T in Loans Went
Senate Banking Committee Chairman Sen. Christopher Dodd and Sen. Richard Shelby question Bernanke and Paulson.   (AP Photo)

The Federal Reserve has lent more than $2 trillion to financial institutions under programs without congressional oversight—and will not disclose to whom or under what terms, Bloomberg reports. The loans are separate from the $700 billion congressionally approved bailout package. Investors and citizens are concerned that the collateral given in these unregulated programs could be improperly valued.

The $700 billion, designed to relieve banks of toxic debt, has been used to buy safe, top-rated shares. Meanwhile, more than half of the $2 trillion in the other programs has left Fed coffers since mid-September, raising eyebrows. Banks and officials said revealing to whom and for what the Fed lends could unfairly influence financial solvency. (More Ben Bernanke stories.)

Get breaking news in your inbox.
What you need to know, as soon as we know it.
Sign up
Get the news faster.
Tap to install our app.
X
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.

X