Yesterday, Bloomberg published a massive investigation into newly released documents showing the number and size of emergency loans made by the Federal Reserve to specific banks during the financial crisis. In total, banks such as Citigroup, Bank of America, Morgan Stanley, and Goldman Sachs, along with dozens of others, received about $1.2 trillion in loans from an alphabet soup of Fed supplementary lending programs. 

It hasn’t been a secret that the Fed committed such a huge amount of money to Wall Street. The Fed announced each program as it began, and by looking at the size and composition of the Fed’s balance sheet it’s always been clear that its actions constituted a massive bailout: 

What’s new is that the Fed recently released the data on each loan and its counterparties. It did this in order to comply with a provision of the Dodd-Frank financial regulation bill (one of the bill’s few bright spots). Although the Fed and banks would argue otherwise, the public has a right to know which companies received help from the Fed.

The Bloomberg article mentions that the 10 largest banks received far more in loans from the Fed ($669 billion) than they did through TARP ($160 billion). In other words, “the bailouts” were much more about the Fed than they were about TARP. For that reason, the public’s anger at TARP has been a little misdirected, as has the administration’s defense of TARP because it hasn’t lost as much money as predicted. 

Yet this new data on the Fed’s loans still doesn’t fully capture the extent of government assistance to the banking sector. The most important aid to the banks has been the Fed’s almost three-year-long policy of zero percent short term interest rates. Investment banks with access to short-term loans have been able to earn risk-free profits by simply funding purchases of longer-term Treasury bills with short-term, zero-percent interest loans.