It turned out that the Congress and the shareholders were not aware of the short term loans worth at least $100 billion which were made by the Federal Reserve to banks during the financial crisis of 2008.
Royal Bank of Scotland, Goldman Sachs and Credit Suisse Group AG were some of the largest recipients of the single-tranche open-market operations provided by the Fed. The program records were released to the media in graphs without mentioning the accompanying exact figures. Thus, it is difficult to determine the exact amount that was borrowed. However, according to specific research of graphs, it was defined that Royal Bank of Scotland and Goldman Sachs borrowed up to $30 billion each, while Credit Suisse took out up to $45 billion. Besides, the amount of at least $15 billion was lent to UBS, Barclays and Deutsche Bank each.
Fed Released Secret Data
The records were released by the Federal Reserve on March 31, but it was done only after the Freedom of Information Act request and the order of the US Supreme Court.
It was found out that the loans were provided for 28 days with the interest rates as low as 0.1 percent, though through the Fed’s discount window it was possible to borrow at 0.5 percent.
Following the statement of the former head of research at the Fed’s Bank of Atlanta, Robert Eisenbeis, the program was called a pure subsidy.