Audit Citigroup? What About the Fed?
September 1, 2009 by supermario
Filed under Economy
thenewamerican.com
Rep. Alan Grayson (D-Fla.) had requested the audit in a June 24 letter to Barofsky, in which Grayson complained: “Congress has very little information regarding the asset guarantee arrangements that the Federal government struck with Citigroup in November, 2008.”
What Congress does know, Grayson continued, is that “the Treasury, FDIC, and Federal Reserve entered into a ‘loss-sharing arrangement’ with Citigroup on a designated pool of $306 billion in ‘primarily mortgage-related assets currently held by Citigroup.’” Grayson went on to observe: “While the assets are still held on the books of Citigroup and the cash flow from these assets accrues to Citigroup, the total downside risk to the Federal Reserve alone from this loss-sharing deal is $234.4 billion.” These enormous public liabilities notwithstanding, Grayson noted: “To date, documents and transcripts describing the negotiations that led to this loss-sharing arrangement are not publicly accessible.”
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