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  • If Wall Street’s Mega Banks Are Safe and Sound as the Fed Says, Why Do They Need a Half Trillion Dollar Bailout Facility at the New York Fed?

If Wall Street’s Mega Banks Are Safe and Sound as the Fed Says, Why Do They Need a Half Trillion Dollar Bailout Facility at the New York Fed?

December 12, 2023

by Pam Martens and Russ Martens Wall Street on Parade

There is a battle raging between the Wall Street mega banks and their federal banking regulators. The regulators want the mega banks to hold more capital against their high risk trading positions to prevent a replay of the bailouts in 2008 and repo bailouts in the fall of 2019. The mega banks have launched a deceptive ad campaign and public relations battle to thwart that from happening.

The federal regulators’ efforts to raise capital are being undermined by Fed Chairman Jay Powell’s perpetual testimony to Congress that the U.S. banking system is safe and sound and adequately capitalized.

Thus far, no member of Congress has thought to question Fed Chair Powell during public hearings as to why the Fed needs a new permanent bailout facility of $500 billion, on top of its century-old Discount Window, if the banking system is adequately capitalized.