Federal Reserve loaned only $1.5 Trillion in loans: Fed Chairman Ben Bernanke

The US Senate and Congress took notice of Federal Reserve’s easy lending late in 2010 and first quarter of this year. Fed Chairman Ben Bernanke was sent a memo to make public detailed reports on the aid provided to the US financial institutions.

Bernanke, in reply to the leaders of the House and Senate, said that overestimated amount lent to these commercial and investment banks is audaciously wrong. The lent money was although on low interest rates for a specific time but it bore fruit and the
return has either been paid fully or is in the process.

The FRB shelled out loans in the 2008 financial crisis and bail-out plan of $700 Billion which was supposed to help get rid of the economical ordeal in the country. Moreover, the central bank of the US also made financial easing in purchasing security and
tangible assets of plummeting companies like General Motors.

The total loaning is estimated in the range of $7.7 to $24 Trillion so far, but Bernanke refuses to accept it. According to his calculations and estimates, the total loaning has been done in the tune of $1.5 Trillion do date and it is on the verge of being
repaid fully.

According to the chairman, approximately $20 Billion has been returned to the Treasury Department in interest incomes. Further adding to greens, he said that around $125 Billion has been returned to the taxpayers in forms of facilities and better employment
rate.

The central bank did not issue the list of the all the financial institutions who borrowed money from the FRB but only published the top five major banks and others who benefitted from the low-interest window.

However, it is alleged that companies like McDonald’s, Caterpillar, Harley-Davidson and National Rural Utilities somehow fall into the financial institutions.

According to the report submitted to the public on Fed’s website, Morgan Stanley, an investment bank, has borrowed the largest sum of money in three years followed by Citigroup and Bank of America.

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Posted by Usman Khalid on Dec 7 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry