Friday, April 24, 2009

Fed to Line Up at TARP Window?

I'd worried about insurance companies ponying up to Treasury's TARP window. Bloomberg indicated The Federal Reserve Bank may ask taxpayers to make it whole. The Fed took a $9.6 billion hit on prime assets it took from AIG and Bear Streans.

Does anyone else recall Ben Bernanke bragging about the Fed's quality collateral? He'll take a 13% hit on those primo holdings. What's left to fall? Bloomberg said:

The central bank lent $2 trillion to financial institutions and hasn’t disclosed information about most of the collateral backing those loans.

Will Ben ask Treasury to make up other declines in a rescuer to rescuer capital call?