Report: Fed’s Secret Repo Loans to Megabanks in 2020 Eclipsed 2008 Bailouts, Data Dump Shows $48 Trillion in Stealth Funding

Following the controversial bank bailouts and Troubled Asset Relief Program (TARP) in 2008, reports show in late 2019 and 2020, the U.S. Federal Reserve participated in providing trillions of dollars in secret repo loans to megabanks. At the end of March, investigative journalists, Pam and Russ Martens from Wall Street on Parade, uncovered $3.84 trillion in stealth repo loans from the Fed to the French financial institution, BNP Paribas in Q1 2020. Additional data indicates that the U.S. central bank leveraged secret repo loans to provide a whopping $48 trillion to megabanks in late 2019 and into 2020.

Reports Show the Fed Funneled Tens of Trillions to Megabanks in 2019 and 2020

While Wall Street eagerly awaits the Federal Reserve’s next benchmark rate hike decision, a number of investigative reports show the U.S. central bank participated in massive bank bailouts that are of biblical proportions. The first report stems from Wall Street on Parade’s Pam and Russ Martens, which accuses the Fed of secretly loaning the French megabank BNP Paribas $3.84 trillion in the first quarter of 2020.

The Martens’ findings highlight many more secret loans that come from a data dump derived from the New York Federal Reserve branch. The data dump showcases secret repo loans from the Fed to megabanks from September 17, 2019, to July 2, 2020. The Wall Street on Parade authors say the media has not reported on the data dump at all.

Report: Fed’s Secret Repo Loans to Megabanks in 2020 Eclipsed 2008 Bailouts, Data Dump Shows $48 Trillion in Stealth Funding
Data from the Wall Street on Parade report published on April 3, 2022, by the investigative journalists, Pam and Russ Martens.

“Mainstream media has heretofore instituted a news blackout on the names of the banks that received the repo loan bailouts and the Fed’s data releases,” the Martens expose details. “As of 4:00 p.m. today, we see no other news reports on this critical information that the American people need to see,” the authors said on March 31, 2022. As of today, April 13, 2022, there are no mainstream media outlets that have covered this news, after Bitcoin.com News searched for more information.

Pam and Russ Martens’ findings are scathing, and the data dump’s numbers almost seem unfathomable. The report states:

The Fed data released this morning shows that the trading units of six global banks received $17.66 trillion of the $28.06 trillion in term adjusted cumulative loans, or 63 percent of the total for all 25 trading houses (primary dealers) that borrowed through the Fed’s repo loan program in the first quarter of 2020.

Bailouts Given to Banks on the ‘Verge of Failure’ and Institutions Holding Mountains of ‘Risky Derivatives’

Another report published on substack.com written by “Occupy the Fed Movement” also highlights the report from Wall Street on Parade, as it explained how the “​​NY Fed quietly dumps data on tens of trillions in repo loan bailouts to Wall Street.”

The researcher notes that Wall Street wants to keep the Fed’s “$48 trillion repo bailout secret.” The Occupy the Fed author asks why the Fed did this, and notes the central bank explains it was meant to “support overnight lending liquidity.” The research adds:

The data tells a very different story. In the fall of 2019, over 60 percent of the repo loans went to just 6 trading houses: “Nomura Securities International ($3.7 trillion); J.P. Morgan Securities ($2.59 trillion); Goldman Sachs ($1.67 trillion); Barclays Capital ($1.48 trillion); Citigroup Global Markets ($1.43 trillion); and Deutsche Bank Securities ($1.39 trillion).” These firms are all massively exposed to risky derivatives, especially Japan’s Nomura. Moreover, Germany’s Deutsche Bank was literally on the verge of total failure at the time.

Famed Economist Tells Wall Street on Parade Journalists the Fed’s Secret Repos ‘Broke the Law’

In addition to the massive secret repo loans, another report highlights statements from the renowned economist Michael Hudson that says the Fed’s secret loans may have been illegal. Hudson claims there was “no liquidity crisis whatsoever,” and “emergency repo loan operations for a liquidity crisis that has yet to be credibly explained.”

The economist explains that the bailouts were supposed to be stopped by the Dodd-Frank Act, but U.S. Treasury secretary Janet Yellen helped change that. “Well, what happened, apparently, was that while the Dodd-Frank Act was being rewritten by the Congress, Janet Yellen changed the wording around and she said, ‘Well, how do we define a general liquidity crisis?’ Hudson told the Martens during a phone interview. “Well, it doesn’t mean what you and I mean by a liquidity crisis, meaning the whole economy is illiquid,” Hudson added.

The professor of economics at the University of Missouri–Kansas City continued:

[Dodd-Frank] was supposed to say, ‘OK, we’re not going to let banks have their trading facilities, the gambling facilities, on derivatives and just placing bets on the financial markets – we’re not supposed to help the banks out of these problems at all.’ So I think the reason that the newspapers are going quiet on this is the Fed broke the law. And it wants to continue breaking the law.

Fed Members Split on Whether or Not US Inflation Will Be Persistent

Meanwhile, as people are awaiting the Federal Reserve’s decision to raise the benchmark bank rate a second time in 2022, a couple of Federal Reserve members are split on whether or not inflation will be a huge problem going forward and whether or not a series of rate hikes are needed.

The two split members include Federal Reserve governor Lael Brainard and Richmond Fed president Thomas Barkin. Brainard told the Wall Street Journal that getting inflation down to the 2% mark is the Fed’s “most important task.” Brainard expects inflation to cool down and Barkin agrees with her.

The Richmond Fed branch president explained that corporate entities need to make supply chains resistant to any possible issues and Barkin is targeting a more conservative inflation rate of around 2.4%.

“The best short-term path for us is to move rapidly to the neutral range and then test whether pandemic-era inflation pressures are easing, and how persistent inflation has become,” Barkin told an audience at a Money Marketeers conference in New York. “If necessary, we can move further,” the Richmond Fed branch president added.

Tags in this story
Bailouts, Bank Bailouts, Barclays Capital, bnp paribas, CitiGroup, Deutsche Bank Securities, Dodd-Frank Act, famed economist, Fed’s secret loans, Goldman Sachs, investigative journalists, investigative reports, J.P. Morgan Securities, Lael Brainard, Liquidity Crisis, Mainstream media, Martens, Michael Hudson, no liquidity crisis, Nomura Securities, Occupy the Fed, Occupy the Fed Movement, Pam and Russ Martens, repo loan program, Thomas Barkin, Wall Street, Wall Street on Parade

What do you think about the reports that claim the Fed’s participated in secret bailouts that were against the law according to the economist Michael Hudson? Do you think this is something the American populace should pay attention to? Let us know what you think about this subject in the comments section below.

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Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




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