US Banks Lobby, FED Loosens Up

The first in-depth account of the pre-crisis decisions of the Federal Reserve (Fed) showed that the gatekeeper of the US economy failed to ensure that the banking system was strong enough to withstand the looming external threats, including the 2011 European crisis.

Banking on the claims of the giant banks that the worst of the US crisis has passed, the Fed allowed 19 big US banks to pay $33 billion in dividends and stock buy-backs to shareholders and executives months before the US economy went into shock over the contagion effect of the European woes.

Apparently, some of the key decision makers at one of the most powerful but secretive economic institutions in the world are themselves previously connected to the banks they are regulating, thus warnings about the ability of the banks to withstand stresses and crises were set aside.

Weak banks in a fragile economy could result in another bailout, which means US taxpayers could be left holding the bag again.

A weak US economy and low purchasing power of the Americans would likely hit Philippine exports, a crucial contributor to our national economy, again.


Read the investigative report of ProPublica