Fed Report on Crisis Loans May Embarass Banks


Reuters
December 1, 2010

  • A d v e r t i s e m e n t
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The Federal Reserve on Wednesday will have to disclose details about emergency loans made during the 2007-2009 financial meltdown, including who borrowed how much and what collateral was offered in return.

The findings, which must be revealed in accordance with a deadline set by a wide-ranging rewrite of U.S. financial rules enacted in July, could shed light on who benefited most from central bank’s controversial efforts to support financial institutions and credit markets.

The results might also reignite debate about whether some bailouts, such as the support for insurer AIG, were appropriate.

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As the financial crisis that began in the summer of 2007 spread beyond the housing sector to the nation’s biggest banks, the Fed, under the leadership of Chairman Ben Bernanke, devised increasingly complex facilities to help restore confidence.

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