Don’t Blink, or You’ll Miss Another Bailout [View all]

Black Swan • ‏@NewsVortex

Don’t Blink, or You’ll Miss Another Bailout http://soc.li/OFPIieP <--#Banksters getting bailed out again - NY Times



http://www.cnbc.com/id/100466032

Let's recap: For zero compensation, the New York Fed released Bank of America from what may be sizable legal claims, knowing that A.I.G. was trying to recover on those claims.

To anyone interested in holding banks accountable for mortgage improprieties, the Fed's actions are bewildering. If the Fed intended that Maiden Lane II own the right to sue Bank of America for fraud, why didn't it pursue such a potentially rich claim on behalf of taxpayers? The Fed made $2.8 billion on the Maiden Lane II deal, but the recovery from Bank of America could have been much greater. Why did it instead release Bank of America from these liabilities and supply declarations that seem to support the bank in its case against A.I.G.?

The New York Fed would not discuss this matter, citing the litigation. But taxpayers, who might have benefited had the New York Fed brought fraud claims, deserve answers to these questions.

In an interview, Senator Sherrod Brown, Democrat of Ohio, who serves on the Banking Committee, said the New York Fed's behavior in this case "underscores that the more we learn about these bailouts, gifts and advantages that Wall Street gets, the clearer it becomes that one set of rules applies to the largest megabanks and another set of rules to the smaller financial institutions and the rest of the country."