View Full Version : Section 13(3) question

Bradley in DC
09-29-2009, 08:45 AM
During the audit the Fed hearing, there was much discussion of this authority.

Good background here:

kaleidoscope eyes
09-29-2009, 08:49 AM
thanks, i was wondering about this.

Bradley in DC
09-29-2009, 08:50 AM
thanks, i was wondering about this.

In short, it refers to the section of the Federal Reserve Act that the Fed has been using for the bailouts for the first time since the Great Depression. Dusted it off to circumvent Congress.

From the link:

This Chapter describes the emergency powers of the Federal Reserve
contained in Section 13(3) of the Federal Reserve Act, a statutory tool that
had not been used since the Great Depression. Section 13(3) has been one
of the government’s most important tools during the financial crisis. It was
used by the Federal Reserve to provide liquidity to Wall Street and US
companies, rescue Bear Stearns and AIG, and conduct monetary policy.
Indeed, it was the government’s tool of choice until the Bush Administration
asked for new congressional authority – first to inject capital directly into
Fannie Mae and Freddie Mac, and then to purchase troubled assets from
and inject capital directly into the financial system as a whole. . .