Philip Cottrell reports that in NEW YORK
The Federal Reserve on Wednesday reluctantly opened the books on its monumental campaign to save the financial system in the midst of the recent crisis, revealing how it distributed some $3.3 trillion in relief.Federal Reserve Chairman Ben Bernanke. The data revealed that the Fed's aid was scattered much more widely than previously understood (to cover fraudulent derivative sales? ed.) The data revealed that the Fed's aid was scattered much more widely than previously understood. Two European megabanks Deutsche Bank and Credit Suisse were the largest beneficiaries of the Fed's purchase of mortgage-backed securities (also known as "toxic derivatives" ed.) The Fed's dollars also flowed to major American companies that are not financial players, including McDonald's and Harley-Davidson, through unsecured short-term loans. The measure, initiated in Jan. 2009 to stimulate the flow of credit and keep household borrowing costs low, led the nation's central bank to purchase more than $1.1 trillion in mortgages packaged into the form of securities. The mortgage bonds are backed by Fannie Mae and Freddie Mac, the twin mortgage giants now owned by taxpayers. Deutsche Bank, a German lender, has sold the Fed more than $290 billion worth of mortgage securities, Fed data through July shows. Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds. The data had previously been secret. It was released Wednesday per the recently-enacted law overhauling the federal financial regulation. The Fed, ferociously backed by the Obama administration, fought lawmakers' desire for full disclosure throughout the financial reform debate.