They made money because the FED started buying the types of securities that they owned with electronically printed money. If this was China the whole thing wou

They made money because the FED started buying the types of securities that they owned with electronically printed money. If this was China the whole thing wouldn't have even happened. The government would have just printed the money, recapitalized the banks and sold off their debts at a discount and punished (severely) anybody who violated banking regulation. The whole fiction that the government has to lend money into existence from the FED and the FED can buy assets off banks from money created out of nothing is this complicated convoluted game is intended to make it hard to figure out what's going on and to make it look like actual productive economic activity is occurring here.