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https://wallstreetonparade.com/2019/12/is-the-feds-3-trillion-in-loans-to-trading-houses-on-wall-street-legal/

Is the Fed’s $3 Trillion in Loans to Trading Houses on Wall Street Legal?

By Pam Martens and Russ Martens: December 3, 2019 ~

Randal Quarles, Vice Chair for Supervision at the Federal Reserve

The House Financial Services Committee has released its memorandum outlining the topics that will be raised in its hearing tomorrow with Federal bank regulators, which will include Randal Quarles, Vice Chairman of Supervision at the Federal Reserve. Noticeably absent from the list of topics is what legislative authority the Federal Reserve has that gives it the legal power to be pumping out hundreds of billions of dollars each week in revolving loans to the trading houses of Wall Street.

Since September 17, the Federal Reserve has allowed its New York Fed branch to funnel approximately $3 trillion to unnamed trading houses on Wall Street, much of it at interest rates of less than 2 percent while the behemoth banks that own those trading houses charge their mom and pop credit card customers 17 percent on their credit cards. This looks like more of what Senator Bernie Sanders calls “socialism for the rich, and rugged, you’re-on-your-own individualism for everyone else.”

Since the Fed turned on its money spigot to Wall Street on September 17, not one hearing has been called in Congress to examine what gives the Federal Reserve, the central bank of the United States, the legal authority to provide cheap loans to the trading houses on Wall Street. These are the same Wall Street trading houses that blew themselves up with derivatives in 2008 and took down the U.S. economy in the greatest financial collapse since the Great Depression. Why should the Federal Reserve encourage more of that activity by providing cheap money?