Bailouts Went To Foreign Banks: Congressional Report Confirms What We Already Knew
Is the offshore banking takeover still a conspiracy theory?
Thursday, Aug 12th, 2010
A Congressional Oversight Panel issued today highlights the fact that large portions of the Treasury’s $700 billion bailout fund have gone straight into the coffers of foreign banks, a fact that we knew months ago, but is only now being officially recognised.
The AP reports:
“Billions of dollars in U.S. rescue funds wound up in big banks in France, Germany and other nations. That was probably inevitable because of the structure of the Treasury Department’s program, the Congressional Oversight Panel says in a new report issued Thursday.”
The report notes that French bank Societe Generale received $11.9 billion, BNP Paribas got $4.9 billion, and Germany’s Deutsche Bank received $11.8 billion. This was a result of the fact that the majority of the $182 billion in bailout funds for AIG was spent on meeting the bank’s obligations to its Wall Street trading partners on credit default swaps.
43 out of 87 of those banks and financial institutions were foreign, according to the report. In addition to French and German banks, money was received by banks in Canada, Britain and Switzerland.
Taxpayers will never get this money back, a fact alluded to in the Congressional report, with the Congressional Budget Office estimating that taxpayers will lose $36 billion – an official figure that is blatantly way off the real cost to taxpayers when you take into account the full exposure of the federal government’s bailout programs since 2007, which stretches beyond $24 trillion.
“The point we make forcefully in this report is that there were no data about where this money was going, no information about where this money was going,” said panel chair Elizabeth Warren, a Harvard law professor. “Without that information, no one could make a deliberate policy choice” about whether to ask foreign governments to contribute to the financial rescues.
Relatively little is known still about the destination of trillions in bailout funds, following consistent and determined efforts on behalf of the Treasury and the Federal Reserve to keep the information secret.
“The panel strongly urges Treasury to start now to report more data about how TARP and other rescue funds flowed internationally and to document the impact that the U.S. rescue had overseas,” the report says.
“The American people have a right to know where the money went and they have a right to that information quickly,” Warren added during a telephone media press conference.
The report concludes that the losses sustained during the financial crisis has revealed the need for an international plan “to handle the collapse of major, globally significant financial institutions.”