The Federal Reserve Bank of New York and Bank of America struck a private deal in July, however, only became public news last week. The filings that were disclosed last week reveal that the Fed may have given away billions of dollars in potential legal claims. Furthermore, the filings show that the Fed was helping protect the institution from another fraud case. The article provides insight into the legal claims and compensation that the Fed are missing out on for letting BoA off the hook.
Article: http://www.nytimes.com/2013/02/17/business/dont-blink-or-youll-miss-another-bank-bailout.html
2 comments:
Pretty shocking article. Makes you wonder was the Fed serving the greater good by providing the funds and hiding the provisions from the public. I think, at the time, the Fed felt the economy could not afford another bank failure and was determined to keep the remaining major financial institutions in business. I think they also felt that it would have appeared extremely questionable to the public if it was made clear that BofA's defense was being funded by the government, the very institution that was trying them. It is open for debate whether their actions did more total good or bad.
It seems like the FED's release of the legal claims was to spite AIG rather than provide a bailout to Bank of America. Either way, the situation is pretty ridiculous.
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