Monday, December 8, 2014

Banks Push Congress to Insure TRILLIONS in Derivatives: “Americans Could Be on the Hook for Absolutely Massive Losses”

This article was originally published by Michael Snyder at the Economic Collapse blog. Editor’s Note: As Michael Snyder notes, JP Morgan Chase, Goldman Sachs, Citibank, Bank of America, Morgan Stanley, and plenty of others have manipulated the market with these derivative bets, and have at least $40 trillion in derivatives exposure. If Congress passes FDIC protection for these controversial and complex financial instruments, it could dwarf existing debt held by the federal government and cost taxpayers an absolutely insurmountable sum, all while letting the bankers walk away free, and with their other winnings in hand. Back in 2011, the Federal Reserve quietly stepped up to the plate to back Bank of America in attempting to park more than $75 trillion in European derivatives exposure in a division covered by FDIC (Federal Deposit Insurance Corporation) loss insurance – meant for ordinary consumers to promote general confidence in the banking system! Bank of America is shifting derivatives in its Merrill investment banking unit to its depository arm, which has access to the Fed discount window and is protected by the FDIC. This means that the investment bank’s European derivatives exposure is now backstopped by U.S. taxpayers.



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