US to bailout Europe
Yesterday it was announced that the United States would send more money to Europe via the International Monetary Fund to bailout faltering economies, such as Ireland:
The United States would be ready to support the extension of the European Financial Stability Facility via an extra commitment of money from the International Monetary Fund, a U.S. official told Reuters on Wednesday.
“There are a lot of people talking about that. I think the European Commission has talked about that,” said the U.S. official, commenting on enlarging the 750 billion euro ($980 billion) EU/IMF European stability fund. “It is up to the Europeans. We will certainly support using the IMF in these circumstances.”
“There are obviously some severe market problems,” said the official, speaking on condition of anonymity. “In May, it was Greece. This is Ireland and Portugal. If there is contagion that’s a huge problem for the global economy.”
The developments have echoes of the pressure applied by Washington on European capitals last May to create the near $1 trillion EFSF safety net that was last week used to rescue Ireland after its banking crisis spiraled out of control.
The IMF, whose biggest single shareholder is the United States, has committed 250 billion euros to the EFSF.
While reluctant to dictate to Europe how it should address the unfolding debt crisis, the U.S. government is growing concerned about the global fallout of Europe’s predicament.
In addition to American taxpayers funding this European bailout, the Federal Reserve finally released details on loans it made to banks, and the list includes foreign financial institutions:
The Federal Reserve revealed details Wednesday of trillions of dollars in emergency aid it provided to U.S. and foreign banks during the financial crisis.
New documents show that the most loan and other aid for U.S. institutions over time went to Citigroup ($2.2 trillion), followed by Merrill Lynch ($2.1 trillion), Morgan Stanley ($2 trillion), Bear Stearns ($960 billion), Bank of America ($887 billion), Goldman Sachs ($615 billion), JPMorgan Chase ($178 billion) and Wells Fargo ($154 billion).
Merrill Lynch was later acquired by Bank of America, while Bear Stearns collapsed and was sold to JPMorgan.
Foreign banks also benefited from the Fed’s aid. They included Swiss bank UBS, which borrowed more than $165 billion, Deutsche Bank ($97 billion) and the Royal Bank of Scotland ($92 billion).
While we are facing a massive national debt, quickly approaching $14 trillion, and will soon see Congress again attempt to raise the debt limit, we’ve been bailing out not only irresponsible financial institutions at home, but also abroad.
Thank you for screwing over the American taxpayer, Federal Reserve. I really hope Rep. Ron Paul (R-TX) makes life hell for you guys over the next two years.