In the wake of Congress’ bailout spree,

In Uncategorized on December 9, 2008 at 7:57 pm

Dear Friends,

In the wake of Congress’ bailout spree, Congress needs to hold serious discussions about the use of taxpayer dollars to prop up failing businesses. While there are many causes for alarm in this saga, one of my specific concerns is the lack of transparency of the Federal Reserve’s various lending programs and the amount of taxpayer dollars being used to intervene in our financial markets. Beginning with the collapse of Bear Stearns in March of this year, I have consistently expressed these concerns. While I agree that Congress and the Federal Reserve must work closely together and consider all options to ease the current credit crisis, I think it is essential that taxpayers know and understand the risks and value of the collateral the Federal Reserve is taking onto its books.

Last week, I submitted a list of questions to Federal Reserve Chairman Ben Bernanke as a follow-up to his testimony at the November 19, 2008 Financial Services Committee hearing. I believe it’s imperative that American taxpayers know the answers to these questions, and my House colleagues and I need the information in order to be informed representatives for our constituents.

Among my list of questions, I would like to know what assets the Federal Reserve has taken onto its books as collateral for the loans made through the various funding and loan facilities including the Primary Dealer Credit Facility, Term Securities Lending Facility and the Commercial Paper Funding Facility? What losses has the Fed currently borne through any or all of these facilities? What methods were used to specifically value those assets?

I would like Chairman Bernanke to provide an up-to-date accounting of the specific asset-to-liability ratio currently on the Federal Reserve’s balance sheet, as well as a list of the specific counterparties of American International Group (AIG) that directly benefited from the government assistance provided to AIG so that it could remain solvent.

These are just a few of the questions that I am posing, and I am eager to hear Chairman Bernanke’s answers.

A complete list of my questions can be found here: http://garrett.house.gov/News/DocumentSingle.aspx?DocumentID=106631


Scott Garrett
Member of Congress


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