Skip to comments.Bernanke to Hill: reporting on Fed loans flawed
Posted on 12/06/2011 1:26:56 PM PST by NormsRevenge
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke on Tuesday pushed back against reports that the Fed had lent banks $7.77 trillion or more during the financial crisis, saying they contained "egregious errors and mistakes."
Bloomberg Markets Magazine last month published an article called "Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress." The article was widely referenced by other news organizations, including the New York Times.
The Bloomberg article said the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system when all guarantees and lending limits were added up.
While Bernanke did not mention Bloomberg or any other news organization by name, he said in a letter to lawmakers that the figure and other estimates of larger total amounts of lending, were "wildly inaccurate." On any given day, Fed credit from its emergency liquidity programs was never more than about $1.5 trillion, he said.
"These articles ... have contained a variety of egregious errors and mistakes," Bernanke told the chairmen of the U.S. Senate Banking and House of Representatives Financial Services committees.
The Fed chair also disputed that the loans were secret or that lawmakers were kept in the dark, saying the central bank announced its emergency programs and reported information about them to Congress and the public.
"Congress was well informed of the volume of borrowing by large banks," he said.
Bernanke further took issue with the assertion that banks reaped an estimated $13 billion of income by taking advantage of the Fed's below-market rates. Firms availing themselves of credit from the central bank's programs had to pay penalty rates for emergency loans, he said.
(Excerpt) Read more at news.yahoo.com ...
Federal Reserve Chairman Ben Bernanke waits to be introduced at a conference on "Small Business and Entrepreneurship during an Economic Recovery" at the Federal Reserve in Washington, November 9, 2011. REUTERS/Hyungwon Kang
US Treasury Secretary Timothy Geithner, center, leaves the European Central Bank after a meeting with officials of the ECB in Frankfurt, Germany, Tuesday, Dec. 6, 2011. Geithner will travel to Berlin later the day to meet with German Finance Minister Wolfgang Schaeuble. (AP Photo/Michael Probst)
Ok, then, if 7.77 is the wrong number, what is the correct number? Maybe it is more than 7.77.