5 ms·

Yes.

• jussij 14y ago
  For anyone interested in the size of the bail out, latest estimates put it at $US 29 trillion. http://www.levyinstitute.org/publications/?docid=1462 http://www.levyinstitute.org/publications/?docid=1462
  • rory096 14y ago
    To be clear, Fed action isn't spending. Look at page 32. It's all in the form of interest paying loans (and $10 trillion went to other central banks, not even private institutions). Much of it is to provide liquidity to banks already eligible to borrow through the discount window - already a source of unlimited loans from the Fed, at under 1% since 2008 (http://en.wikipedia.org/wiki/Discount_window http://en.wikipedia.org/wiki/Discount_window). Much of the rest is to provide liquidity to other institutions that couldn't borrow directly, because the liquidity that's supposed to be indirectly ensured by the discount rate had dried up. So yes, the Fed responded to the financial crisis by increasing liquidity. That it mostly occurred through ad-hoc programs and instruments doesn't change the fact that it's the basic function of the central bank. It's in no way paying for Wall Street salaries.
  • rayiner 14y ago
    That's a completely ridiculous number, because you're adding up short term transactions. If you lend me, and I pay back immediately, $100 every day for a year, you did not lend me $36,500.