Rep. Paul planning hearing on Fed foreign lending

WASHINGTON, April 2 Sat Apr 2, 2011 3:08pm EDT

WASHINGTON, April 2 (Reuters) - Persistent Federal Reserve critic Representative Ron Paul plans to hold a hearing on the U.S. central bank's emergency loans to the branches of non-U.S. banks, his spokeswoman said on Saturday.

"I was surprised and deeply disturbed ... to learn the staggering amount of money that went to foreign banks," Paul said in a statement.

"These lending activities provided no benefit to American taxpayers, the American economy, or even directly to American banks," he said.

Paul spokeswoman Rachel Mills said the Republican lawmaker, who advocates abolishing the Fed and returning to a currency backed by gold or silver, is planning a hearing on the discount windowlending in May. Details are still being worked out, she told Reuters.

Data the Fed was required by courts to disclose on Thursday showed the U.S. branches of foreign-headquartered financial firms had made extensive use of the central bank's emergency lending discount window during the severe financial crisis that froze financial markets in the fall of 2008.

During that period, the Fed actively encouraged financial firms to obtain funding from an array of unusual emergency funding vehicles to prevent markets from freezing up entirely.

While making emergency loans is at the discretion of the individual regional Fed banks, the discount window is open to any firms in sound condition able to post good collateral. (Reporting by Mark Felsenthal; editing by Mohammad Zargham)

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Comments (17)
LibertyLooms wrote:
The Fed has been running an international shell game to prop up foreign central banks–probably to stave off a huge round of earthshaking banking collapses. It’s about time that Congress reign in–and ultimately abolish–the Fed. Thanks to the learned and diligent Ron Paul!

Apr 03, 2011 1:16am EDT  --  Report as abuse
Eric.Klein wrote:
The real questions are:

Did the foreign banks repay?
How much did the US government make on the deals?
How many homes/jobs were saved or created by loaning the money?

Lets not be dogmatic, look to see what the cost/benefit of the deals was before denouncing them and the FED

Apr 03, 2011 8:33am EDT  --  Report as abuse
stonehillady wrote:
Almost 100 years since the FED’s sneaked into being & more wars, death, & loss of money of the comman people the world has ever known for the UnGodly Compounded interest. The American people were giving the right to print & coin our own money, which our constitution provided, W.Wilson was a socialist & socialism is a major banksters best friend for to promise goodies, means compounded interest from the banksters for crumbs as they tax you. Why we borrow money from them, when we could get interest free loans from a government central bank like North Dakota’s only means our politicians are in bed with the banksters that fund their campaigns…Ron Paul doesn’t except monies from Fascists because, he works for the people not Big Business. Our constitution never intended a tax on Labour, that was Slavery & it is Slavery, taxes were to come from Corporate Profits, dividends, bonuses, foreigners that worked here & Sales taxes… Today, it seems just the opposite for major corporations & foreigners hardly pay any taxes.

Apr 03, 2011 9:09am EDT  --  Report as abuse
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