Report: Fed lent big 6 banks nearly $8 trillion

Bush Administration officials kept in dark

Think the TARP bailout was a big deal with its $700 billion bailout of the big six banks deemed “too big” to fail.

Think again.

A report which surfaced today following extensive litigation shows for the first time the true dimensions of the Federal Reserve's largesse to the nation's largest banks.

It totaled $7.77 trillion in loans – loans that were kept secret from the public – and kept confidential because Chairman Ben Bernanke did not wish to create a “stigma” for the institutions in the public eye.

The nation's six largest banks, JPMorgan, Bank of America, Citigroup Inc., Wells Fargo & Co., Goldman Sachs Group Inc., and Morgan Stanley accounted for 63 percent of the average daily debt to the Fed by all publicly traded U.S. banks. They netted some $13 billion in profits as a result of the loans at a time when homeowners were losing their property at a tremendous clip to foreclosures and the prospects of having a career evaporated for most Americans like water in a desert mirage.

A total of 29,000 pages of information detailing 21,000 separate transactions released under the Freedom of Information Act after lawyers wrangled the information out of the super secret private banking institution shows that at one point, Bank of America owed the Federal Reserve some $86 billion for loans it took in just one day. (click here for a news report on an audit the Fed bill pending in Congress)

Even the Fed's top executives were unaware of the true amounts involved.

Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.”

According to published reports, most high ranking officials of the Bush Administration were unaware of the magnitude of the bailout loans.

Unlike the TARP funds, these funds had “no strings attached,” according to Brad Miller, a North Carolina Democrat on the House Financial Services Committee.

The issue could very well unite the Tea Party and the Occupy Wall Street protesters, according to a Senator who has sponsored a bill that would limit the size of individual banking institutions.

“When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio. “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”