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WALL STREET Aristocracy Got $1.2T in Loans – Bloomberg

August 22, 2011

Aug. 21 (Bloomberg) — Robert E. Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis, now vice president at the Kansas City, Missouri-based Kauffman Foundation, Richard Herring, a finance professor at the University of Pennsylvania, Roger Lister, a former Fed economist who’s now head of financial-institutions coverage at credit-rating firm DBRS Inc., and Kenneth Rogoff, a former chief economist at the International Monetary Fund and now an economics professor at Harvard University, talk about the U.S. government’s $1.2 trillion bailout of the banking system and the outlook for regulatory overhaul of the industry. (Source: Bloomberg)

Wall Street Aristocracy Got $1.2T in Loans

By Bradley Keoun and Phil Kuntz – Aug 21, 2011

The Federal Reserve provided as much as $1.2 trillion in public money to banks and other companies from August 2007 through April 2010 to head off a depression. Source: Bloomberg

Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.

By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.

Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.

“These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.”

via Wall Street Aristocracy Got $1.2T in Loans – Bloomberg.

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One Comment
  1. August 22, 2011 9:44 AM

    The Republican Party is OK with bailing out the giants but not taxing them. Meanwhile the official unemployment rate is 9.1%. We all know that the real unemployment rate is much higher. The recession is officially over but 6 million people have been unemployed for more than a year. Who did the Federal Reserve save the economy for? It certainly was not the average American.

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