Bank bailout bigger than first reported

Dec. 5, 2011

The Federal Reserve loaned banks $7.7 trillion between March 2007 and March 2009, half the value of all the goods and services produced by the U.S. economy, reports CBS Sunday Morning. In fact, in one day - December 5, 2008 - Banks borrowed $1.2 trillion from the Fed. That's 11 times the $700 billion in aid provided to homeowners by TARP.

The Federal Reserve loaned banks $7.7 trillion between March 2007 and March 2009, half the value of all the goods and services produced by the U.S. economy, reports CBS Sunday Morning. In fact, in one day - December 5, 2008 - Banks borrowed $1.2 trillion from the Fed. That's 11 times the $700 billion in aid provided to homeowners by TARP.

Those statistics obtained by Bloomberg Markets Magazine through the Freedom of Information Act, also found the banks obtained the funds at 0.01 percent interest, allowing them to keep their assets intact, and bottom line six banks - Wells Fargo, Bank of America, CitiGroup, JP Morgan Chase, Goldman Sachs and Morgan Stanley made $13 billion from the spread on the money they borrowed, and their assets grew 39 percent from $6.8 trillion in September 2006 to $9.5 trillion in September 2011.

According to the Fed, all the loans were backed by collateral and have almost all been repaid.