Bank of America is attempting to rob America blind with the help of the Federal Reserve
(End the Lie) -- by Madison Ruppert --
Bank of America Corp. (BAC) is in trouble and any other business which would just go under without any help; the corrupt banksters, with the help of the private Federal Reserve, are attempting to pass off their failures to the American people. Again.
Only three years ago the American people had massive debts piled on our heads by being forced to bail out the biggest lenders in the United States.
During this bailout, Bank of America received a whopping $45 billion and as of midyear had deposits numbering some $1.04 trillion.
Now Bank of America is attempting to protect itself from its derivative exposure through its Merrill Lynch unit by moving derivatives to a subsidiary replete with insured deposits.
This means that if the bank were to fail, the Federal Deposit Insurance Corporation, or FDIC, would be on the hook for paying for the moved derivatives.
If the derivatives remained in Merrill Lynch, which is not insured by the FDIC and thus the taxpayer, and the bank were to collapse, the money would be lost.
Unsurprisingly, the private Federal Reserve has absolutely no problem with the move, while the FDIC is objecting according to anonymous sources cited by Bloomberg.
Even more unsurprisingly, Bank of America thinks that no regulatory approval is needed, regardless of the fact that this is an openly fraudulent way of insuring items which should never be insured.
This is surreptitiously timed given Moody’s downgraded Bank of America’s long term credit ratings on September 21st, slashing both the holding company and the retail bank’s ratings by two notches each.
Section 23A of the Federal Reserve Act is supposed to act like a firewall, preventing the affiliates of lenders from gaining from the lenders’ federal subsidy and also to protect the bank from risks originating from the affiliate, according to Saule Omarova, a University of North Carolina at Chapel Hill law professor.
This section was created because, “Congress doesn’t want a bank’s FDIC insurance and access to the Fed discount window to somehow benefit an affiliate,” Omarova said to Bloomberg.
However, in September of 2010, Bank of America was officially given a letter of exemption from Section 23A, effectively ending what the Federal Reserve’s general counsel, Scott Alvarez, told Congress in 2008 “is among the most important tools that U.S. bank regulators have to protect the safety and soundness of U.S. banks”.
So, with the help of the Fed, Bank of America is already exempt from one of the most important impediments to banks going out of control.
And now the Fed is once again backing the Bank of America’s attempts to undermine what little regulation we have in the banking system by putting the American people on the hook for their derivative exposure...MORE...LINK