According to data compiled by the Levy Economics Institute, the Fed’s bailout of Wall Street during the financial crisis amounted to a staggering $29 trillion (including the central bank liquidity swap lines, CBLS) – a sum that neither the American people nor Congress would learn about until years after the loans had been made and a multi-year court battle by the Fed to suppress the information had been won by media outlets.
The largest amounts of the $29 trillion did not go to commercial banks to shore up the U.S. economy through consumer loan relief or business loans. It went to three of the largest trading houses on Wall Street. Citigroup received $2.65 trillion; Merrill Lynch received $2.43 trillion; and Morgan Stanley received $2.27 trillion. (See page 33 at this link.) The fourth largest was not even a bank or Wall Street firm. It was AIG, a large insurance company that Wall Street’s trading houses had buried as the counterparty to their derivative bets. AIG got a cool $1 trillion in loans from the Fed.