Truth to Power

Kucinich: Are we paying the fed to slow down credit?

Kucinich Asks ‘Is the Fed Paying Banks NOT to Loan Money?’

WASHINGTON (JULY 21, 2009) – – Representative Dennis Kucinich (D-OH), who has led the effort challenging the use of TARP funds through two administrations, today questioned whether or not “banks are parking a historic amount of taxpayers’ money in the Federal Reserve while the businesses and consumers across America are starved for credit” and whether the Federal Reserve is “paying banks not to make loans.”

Kucinich cited today’s Fed news report on Bloomberg.com:

“Meanwhile, banks’ excess reserves at the Fed rose to a record $877.1 billion daily average in the two weeks ended May 20, from $2 billion a year earlier. Excess reserves – money available for lending that banks choose to leave with the Fed instead – averaged $743.9 billion in the first two weeks of this month.” – – Bloomberg.com

“If these reports are true, this raises significant questions about who the Fed is working for. There is record unemployment and businesses and consumers across American are starved for capital, if the Fed is paying higher interest rates on term deposits in order to induce banks to keep money at the Fed rather than lend, it would be an outrage,” Kucinich said.</em>

As usual, Kucinich remains one of the few in Congress speaking sense.


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