Post Gets Loans and Gifts Confused with Big Banks

[WildNovember]

The Post ran an article with the headline: "big banks got $13 billion in undisclosed Fed loans." Actually, the article refers to a Bloomberg investigative piece by Bob Ivry and colleagues that found that Fed loans at below market interest rates amounted to a subsidy of $13 billion to the country's largest banks. This $13 billion was effectively a gift from the taxpayers to J.P. Morgan, Goldman Sachs, and other large banks. It was not a loan as the Post headline implies.

http://www.cepr.net/index.php/blogs/beat-the-press/post-gets-loans-and-gifts-confused-with-big-banks#comments

Here's a comment on that:

1.5 billion subsidy for Citicorp
written by AndrewDover, November 29, 2011 11:53 AM

I took a quick look at the TAF data for Citicorp, available at
http://www.federalreserve.gov/....htm#data

It turned out that you had to assume that the market rate for Citicorp to borrow was 10% for those loans to have been a $1.5 billion subsidy.

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I can't find the Post story, but here's the same one from Business Week, and I think the same story has already been posted here at DU a few times.

http://news.businessweek.com/article.asp?documentKey=1376-LVDMGO1A74E901-5CG1C7JPCU5J1O688G3J3C73JE