In a letter to Federal Reserve Chairman Ben Bernanke and others, Sanders asked why the central bank made at least 46 emergency, low-interest loans to the Arab Banking Corp., in which the Central Bank of Libya owns a 59 percent stake.
Bernie Sanders asks why the US Federal Reserve bailed out the Bank of Libya. (photo: AP)
Why Did the Fed Bail Out the Bank of Libya?
02 April 11
How Do Gadhafi's Bankers Avoid US Sanctions?
en. Bernie Sanders (I-Vt.) today questioned why the Federal Reserve provided more than $26 billion in credit to an Arab intermediary for the Central Bank of Libya.
The total includes at least $3.2 billion in loans that the Fed was forced to make public today in addition to earlier revelations under a Sanders provision in the Wall Street reform law.
Sanders also asked why the Libyan-owned bank and two of its branches in New York, NY, were exempted from sanctions that the United States this month slapped on other Libyan businesses to pressure Col. Moammar Gadhafi's government.
"It is incomprehensible to me that while creditworthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit to a bank that is substantially owned by the Central Bank of Libya," Sanders said.
In a letter to Federal Reserve Chairman Ben Bernanke and others, Sanders asked why the central bank made at least 46 emergency, low-interest loans to the Arab Banking Corp., in which the Central Bank of Libya owns a 59 percent stake.
In the same letter, Sanders asked Treasury Secretary Timothy Geithner why the Treasury Department on March 4 let the Libya-controlled bank skirt the economic sanctions against Libya.
The senator also questioned why the Bahrain-based Arab Banking Corp. is even allowed to operate branches inside United States. "Why would the US government allow a bank that is predominantly owned by the Central Bank of Libya - an institution on which the US has imposed strict economic sanctions - to operate two banking branches within our own borders?" Sanders asked.
The Fed transactions were made public earlier this year as a result of a Sanders provision in the Wall Street reform law that forced the US central bank to reveal which financial institutions it bailed out during the financial crisis from 2007 to 2010.
In another dubious twist, the Fed loans, at interest rates as low as 0.25 percent, relied on US Treasury securities as collateral. In other words, at the same time that the Arab Banking Corp. was borrowing money at almost zero interest from one arm of the government, the Fed, it was lending money at a higher interest rate to another arm of the US government, the Treasury Department.
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There are always more going on behind the curtain than we see...
Bernie Sanders, I love you!!
Pure poetry!
Israel has open credit from US on the top of 3 billions + "bomb" aid to Israel.
Profit for GE, Boeing, ...
we trust - NOT small business credit.
Now we have third US - Obama/Clinton against Africa War - with UN blessing.
Happily Sanders and Kucinich have recently become a bit more savvy about the role of the fed and joined forces with Ron Paul who has for decades been warning of this sort of activity.
The FOIA which was released two days ago also revealed billions in discount loans to many other foreign banks. Why should American taxpayers need to pay to prop up foreign banks? Because the progressive political forces which created the fed legislated this activity in the name of "consumer protection."
I really wish progressives would get a little more knowledgeable about finance and stop falling for every politician's rhetoric.
Lee Nason
New Bedford, Massachusetts
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NOT Coming Back from This One!
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Those are human beings bleeding and dying.
This piece from Senator Sanders shows us just what sort of criminal conspiracy is running our economy and our government.
directly address and hold President Obama accountable for the answers to your questions so that he can get to the bottom of this. Time for fraud, greed, waste to be fully taken out of our politics. We have too many "Mini-Gaddafi's".
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