Federal Reserve Board Chairman Ben Bernanke testifies on Capitol Hill in Washington, Tuesday, Oct. 4, 2011, before the Joint Economic Committee hearing on the economic outlook. (AP Photo/Evan Vucci)
The Federal Reserve doled out a staggering 7.77 trillion dollars in secret loans in an effort to stabilize banks during the financial crisis — cheap money from the public purse that the banks subsequently lent out at higher rates for a profit of $13 billion dollars, Bloomberg News reports.
Although Bloomberg has been publishing findings from its analysis of over 29,000 pages of documents since August, the true magnitude of the central bank’s intervention during the economic crisis has only come to light in recent days.
“Add up guarantees and lending limits,” the Bloomberg report states, “and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.”
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