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GAO Federal Reserve Audit - $16 Trillion

GAO Federal Reserve Audit - $16 Trillion

Ratings: (0)|Views: 697|Likes:
Published by Love For Life
This should of been all over the news????? Even finding the PDF file was not easy to find from GAO website.

I've attached the PDF to look at.

If that $16 Trillion had been divided equally among every man, woman and child in the US (310 million of us) each of us would have received over $50,000. Our economy would be humming, banks & corporations would have gotten their share.

On the other hand, if that $16 Trillion had been divided equally among all the people on this planet (not quite 7 billion) every person would have received more than $2200. That's the scale of this crime against humanity.

http://www.youtube.com/watch?v=HUykpqlEvn0


PASS THIS ALONG, USA SHOULD BE IN REVOLT RIGHT NOW......

The first ever GAO (Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill (HR1207), so that a complete audit would not be carried out.

Ben Bernanke, Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets.

Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander's webpage earlier this morning. What was revealed in the audit was startling:

$16,000,000,000,000.00 (TRILLION) had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments.

The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest.

Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious - the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion.

The entire national debt of the United States government spanning its 200+ year history is only $14.5 trillion.

The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion.

Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill:

There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars.

As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.

This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.’ Bernie Sanders(I-VT)

When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left.

When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity ont
This should of been all over the news????? Even finding the PDF file was not easy to find from GAO website.

I've attached the PDF to look at.

If that $16 Trillion had been divided equally among every man, woman and child in the US (310 million of us) each of us would have received over $50,000. Our economy would be humming, banks & corporations would have gotten their share.

On the other hand, if that $16 Trillion had been divided equally among all the people on this planet (not quite 7 billion) every person would have received more than $2200. That's the scale of this crime against humanity.

http://www.youtube.com/watch?v=HUykpqlEvn0


PASS THIS ALONG, USA SHOULD BE IN REVOLT RIGHT NOW......

The first ever GAO (Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill (HR1207), so that a complete audit would not be carried out.

Ben Bernanke, Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets.

Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander's webpage earlier this morning. What was revealed in the audit was startling:

$16,000,000,000,000.00 (TRILLION) had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments.

The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest.

Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious - the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion.

The entire national debt of the United States government spanning its 200+ year history is only $14.5 trillion.

The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion.

Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill:

There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.

In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars.

As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.

This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.’ Bernie Sanders(I-VT)

When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left.

When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity ont

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Published by: Love For Life on Aug 03, 2011
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FEDERAL RESERVESYSTEMOpportunities Exist toStrengthen Policiesand Processes forManaging Emergency Assistance
Report to Congressional Addressees
July 2011
GAO-11-696
United States Government Accountability Office
GAO
 
 
United States Government Accountability Office
Highlights of GAO-11-696, a report tocongressional addressees
July 2011
FEDERAL RESERVE SYSTEM
Opportunities Exist to Strengthen Policies andProcesses for Managing Emergency Assistance
 What GAO Found
On numerous occasions in 2008 and 2009, the Federal Reserve Board invokedemergency authority under the Federal Reserve Act of 1913 to authorize newbroad-based programs and financial assistance to individual institutions tostabilize financial markets. Loans outstanding for the emergency programspeaked at more than $1 trillion in late 2008. The Federal Reserve Board directedthe Federal Reserve Bank of New York (FRBNY) to implement most of theseemergency actions. In a few cases, the Federal Reserve Board authorized aReserve Bank to lend to a limited liability corporation (LLC) to finance thepurchase of assets from a single institution. In 2009 and 2010, FRBNY alsoexecuted large-scale purchases of agency mortgage-backed securities tosupport the housing market. The table below provides an overview of allemergency actions covered by this report. The Reserve Banks’ and LLCs’financial statements, which include the emergency programs’ accounts andactivities, and their related financial reporting internal controls, are auditedannually by an independent auditing firm. These independent financial statementaudits, as well as other audits and reviews conducted by the Federal ReserveBoard, its Inspector General, and the Reserve Banks’ internal audit function, didnot report any significant accounting or financial reporting internal control issuesconcerning the emergency programs.The Reserve Banks, primarily FRBNY, awarded 103 contracts worth $659.4million from 2008 through 2010 to help carry out their emergency activities. A fewcontracts accounted for most of the spending on vendor services. For asignificant portion of the fees, program recipients reimbursed the Reserve Banksor the fees were paid from program income. The Reserve Banks relied moreextensively on vendors for programs that assisted a single institution than for broad-based programs. Most of the contracts, including 8 of the 10 highest-valuecontracts, were awarded noncompetitively, primarily due to exigentcircumstances. These contract awards were consistent with FRBNY’s acquisitionpolicies, but the policies could be improved by providing additional guidance onthe use of competition exceptions, such as seeking as much competition aspracticable and limiting the duration of noncompetitive contracts to the exigencyperiod. To better ensure that Reserve Banks do not miss opportunities to obtaincompetition and receive the most favorable terms for services acquired, GAOrecommends that they revise their acquisition policies to provide such guidance.FRBNY took steps to manage conflicts of interest for its employees, directors,and program vendors, but opportunities exist to strengthen its conflict policies. Inparticular, FRBNY expanded its guidance and monitoring for employee conflicts,but new roles assumed by FRBNY and its employees during the crisis gave riseto potential conflicts that were not specifically addressed in the Code of Conductor other FRBNY policies. For example, FRBNY’s existing restrictions on itsemployees’ financial interests did not specifically prohibit investments in certainnonbank institutions that received emergency assistance. To manage potentialconflicts related to employees’ holdings of such investments, FRBNY relied onprovisions in its code that incorporate requirements of a federal criminal conflictof interest statute and its regulations. Given the magnitude of the assistance
ViewGAO-11-696or key components.For more information, contact Orice WilliamsBrown, 202-512-8678 or williamso@gao.gov 
 Why GAO Did This Study
The Dodd-Frank Wall Street Reformand Consumer Protection Act directedGAO to conduct a one-time audit of theemergency loan programs and other assistance authorized by the Board of Governors of the Federal ReserveSystem (Federal Reserve Board)during the recent financial crisis. Thisreport examines the emergencyactions taken by the Federal ReserveBoard from December 1, 2007, throughJuly 21, 2010. For each of theseactions, where relevant, GAO’sobjectives included a review of (1) thebasis and purpose for its authorization,as well as accounting and financialreporting internal controls; (2) the use,selection, and payment of vendors;(3) management of conflicts of interest;(4) policies in place to secure loanrepayment; and (5) the treatment of program participants. To meet theseobjectives, GAO reviewed programdocumentation, analyzed programdata, and interviewed officials from theFederal Reserve Board and ReserveBanks (Federal Reserve System).
 What GAO Recommends
GAO makes seven recommendationsto the Federal Reserve Board tostrengthen policies for managingnoncompetitive vendor selections,conflicts of interest, risks related toemergency lending, anddocumentation of emergency programdecisions. The Federal Reserve Boardagreed that GAO’s recommendationswould benefit its response to futurecrises and agreed to strongly consider how best to respond to them.
 
Highlights of GAO-11-696 (
Continued
)United States Government Accountability Office
and the public’s heightened attention to the appearance of conflicts related to Reserve Banks’ emergency actions,existing standards for managing employee conflicts maynot be sufficient to avoid the appearance of a conflict in allsituations. As the Federal Reserve System considersrevising its conflict policies given its new authority toregulate certain nonbank institutions, GAO recommends itconsider how potential conflicts from emergency lendingcould inform any changes. FRBNY managed vendor conflict issues through contract protections and actions tohelp ensure compliance with relevant contract provisions,but these efforts had limitations. For example, whileFRBNY negotiated important contract protections, such asrequirements for ethical walls, it lacked written guidance onprotections that should be included to help ensure vendorsfully identify and remediate conflicts. Further, FRBNY’s on-site reviews of vendor compliance in some instancesoccurred as far as 12 months into a contract. FRBNYimplemented a new vendor management policy but hasnot yet finalized another new policy with comprehensiveguidance on vendor conflict issues. GAO recommendsFRBNY finalize this new policy to reduce the risk thatvendors may not be required to take steps to fully identifyand mitigate all conflicts.While the Federal Reserve System took steps to mitigaterisk of losses on its emergency loans, opportunities exist tostrengthen risk management practices for future crisislending. The Federal Reserve Board approved programterms and conditions designed to mitigate risk of lossesand one or more Reserve Banks were responsible for managing such risk for each program. Reserve Banksrequired borrowers under several programs to postcollateral in excess of the loan amount. For programs thatdid not have this requirement, Reserve Banks requiredborrowers to pledge assets with high credit ratings ascollateral. For loans to specific institutions, Reserve Banksnegotiated loss protections with the private sector andhired vendors to help oversee the portfolios thatcollateralized loans. The emergency programs that haveclosed have not incurred losses and FRBNY does notproject any losses on its outstanding loans. To managerisks posed by these new lending activities, ReserveBanks implemented new controls and FRBNYstrengthened its risk management function. In mid-2009,FRBNY created a new risk management division andenhanced its risk analytics capabilities. But neither FRBNYnor the Federal Reserve Board tracked total exposure andstressed losses that could occur in adverse economicscenarios across all emergency programs. Further, theFederal Reserve System’s procedures for managingborrower risks did not provide comprehensive guidance for how Reserve Banks should exercise discretion to restrictprogram access for higher-risk borrowers that wereotherwise eligible for the Term Auction Facility (TAF) andemergency programs for primary dealers. To strengthenpractices for managing risk of losses in the event of afuture crisis, GAO recommends that the Federal ReserveSystem document a plan for more comprehensive risktracking and strengthen procedures to manage programaccess for higher-risk borrowers.While the Federal Reserve System took steps to promoteconsistent treatment of eligible program participants, it didnot always document processes and decisions related torestricting access for some institutions. Reserve Banksgenerally offered assistance on the same terms toinstitutions that met announced eligibility requirements. For example, all eligible borrowers generally could borrow atthe same interest rate and against the same types of eligible collateral. Reserve Banks retained and exerciseddiscretion to restrict or deny program access for institutionsbased on supervisory or other concerns. For example, dueto concerns about their financial condition, Reserve Banksrestricted TAF access for at least 30 institutions. Further, ina few programs, FRBNY placed special restrictions, suchas borrowing limits, on eligible institutions that posedhigher risk of loss. Because Reserve Banks lacked specificprocedures that staff should follow to exercise discretionand document actions to restrict higher-risk eligibleborrowers for a few programs, the Federal ReserveSystem lacked assurance that Reserve Banks appliedsuch restrictions consistently. Also, the Federal ReserveBoard did not fully document its justification for extendingcredit on terms similar to the Primary Dealer Credit Facility(PDCF) to affiliates of a few PDCF-eligible institutions anddid not provide written guidance to Reserve Banks ontypes of program decisions that would benefit fromconsultation with the Federal Reserve Board. In 2009,FRBNY allowed one entity to continue to issue to theCommercial Paper Funding Facility, even though a changein program terms by the Federal Reserve Board likelywould have made it ineligible. FRBNY staff said theyconsulted the Federal Reserve Board regarding thissituation, but did not document this consultation and didnot have any formal guidance as to whether suchcontinued use required approval by the Federal ReserveBoard. To better ensure an appropriate level of transparency and accountability for decisions to extend or restrict access to emergency assistance, GAOrecommends that the Federal Reserve Board set forth itsprocess for documenting its rationale for emergencyauthorizations and document its guidance to ReserveBanks on program decisions that require consultation withthe Federal Reserve Board.

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