Rep. Paul planning hearing on Fed foreign lending

WASHINGTON, April 2 (Reuters) – Persistent Federal Reserve
critic Representative Ron Paul plans to hold a hearing on the
U.S. central bank’s emergency loans to the branches of non-U.S.
banks, his spokeswoman said on Saturday.

“I was surprised and deeply disturbed … to learn the
staggering amount of money that went to foreign banks,” Paul
said in a statement.

“These lending activities provided no benefit to American
taxpayers, the American economy, or even directly to American
banks,” he said.

Paul spokeswoman Rachel Mills said the Republican lawmaker,
who advocates abolishing the Fed and returning to a currency
backed by gold or silver, is planning a hearing on the discount
windowlending in May. Details are still being worked out, she
told Reuters.

Data the Fed was required by courts to disclose on Thursday
showed the U.S. branches of foreign-headquartered financial
firms had made extensive use of the central bank’s emergency
lending discount window during the severe financial crisis that
froze financial markets in the fall of 2008.

During that period, the Fed actively encouraged financial
firms to obtain funding from an array of unusual emergency
funding vehicles to prevent markets from freezing up entirely.

While making emergency loans is at the discretion of the
individual regional Fed banks, the discount window is open to
any firms in sound condition able to post good collateral.
(Reporting by Mark Felsenthal; editing by Mohammad Zargham)

Rep. Paul planning hearing on Fed foreign lending