US banks got $1.2trn ‘secret' bailout

The Federal Reserve gave out $1.2trn in loans to US banks secretly in 2008, Federal documents have revealed.

The money was handed out in December 2008, when banks were still assuring consumers they were healthy, Bloomberg Markets Magazine has claimed. Banks went on to obtain $13bn in income because of below-market rates, the magazine said. The secret bailout was far larger than the $700bn Troubled Asset Relief Programme (TARP) set up in October 2008 to bail out Wall Street. Almost all of the loans have been repaid, but Bloomberg argued the money did not just bail out the banks but help them to grow larger and more successful.