Courtesy of Pam Martens
Jerome Powell, Chairman of the Federal Reserve
You really can’t make this stuff up. A G30 Working Group Chaired by Tim Geithner, the former President of the New York Fed, that secretly sluiced $29 trillion to bail out the Wall Street banks from their hubristic collapse in 2008, released a report today calling for a Standing Repo Facility from the Fed that would be “open to a broad range of market participants….”
The ink was barely dry on that report when the Fed issued a press release today saying it was doing just that. The Standing Repo Facility (effectively meaning that it is permanent until the Fed says otherwise) will be able to lend out $500 billion in overnight loans each day at below-market interest rates. If the $500 billion runs out, Fed Chair Jerome Powell has the discretion to increase it. The repo operations will be conducted by the Open Market Desk of the New York Fed – which means that the names of the banks getting the loans will never see the light of day, unless a media powerhouse decides to stand up for democracy and transparency and take the Fed to Court.
The cringe-worthy name of Geithner is enhanced by two other cringe-worthy members of the Working Group: Larry Summers, who helped repeal the Glass-Steagall Act so that Frankenbanks on Wall Street could hold trillions of dollars of risky derivatives alongside trillions of dollars of taxpayer-backstopped deposits from moms and pops; and Bill Dudley, another former President of the New York Fed whose wife collected $190,000 a year from JPMorgan Chase, while it was “supervised” by the New York Fed.
Unlike the Federal Reserve Board, the New York Fed is not a federal agency. It is privately owned by the mega banks on Wall Street. See These Are the Banks that Own the New York Fed and Its Money Button.
To spin the appearance that this isn’t just a bailout of the trading units of the mega banks on Wall Street (the so-called “Primary Dealers” who are already approved counterparties for the Fed’s repo operations), the Fed announced that the Standing Repo Facility (SRF) will be expanded to other financial institutions. The New York Fed clarified that as follows:
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