Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Giordano Bruno who wrote (364957)	4/9/2008 4:03:49 PM
From: ldo79	Read Replies (1) \| Respond to of 436258

US Rep Raises Concerns About Discount Window Abuses Last update: 4/9/2008 1:43:00 PM By Michael R. Crittenden Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--Investment banks may be abusing the money they are borrowing from the Federal Reserve's discount window in order to issue dividends, a top House Democrat said Wednesday. Rep. Paul Kanjorski, D-Penn., the chairman of the House subcommittee with oversight over the capital markets, raised the concern during a hearing Wednesday. He said a hedge fund manager suggested in a recent meeting that large banks may be borrowing billions of dollars in funds made available by the central bank in order to benefit their shareholders. "I myself will be incensed if after going to the rescue of these institutions there are those types of abuses occurring," Kanjorski said. "Particularly I'll be incensed if the Federal Reserve hasn't marched up here with emergency sirens saying there's something happening that shouldn't happen." Federal Reserve Gov. Randall Kroszner said he was unaware of any type of abuses, and that any such actions wouldn't be tolerated. He stressed that the funds have only been made available to a "limited number of institutions with which we have had a long-standing relationship." Still, Kroszner suggested Congress might want to pass legislation creating standards for the use of money borrowed through the Federal Reserve's lending facility. "It is going to be an issue going forward that Congress will need to consider whether there will be additional regulatory authority needed if this facility were to continue," Kroszner said.